C1,192,021,267 Fleet Street Finance Two P.L.C.

Transcription

1 C1,192,021,267 Fleet Street Finance Two P.L.C. (a public company incorporated with limited liability under the laws of Ireland with registration number ) C780,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2014 C170,000,000 Class B Commercial Mortgage Backed Floating Rate Notes due 2014 C143,100,000 Class C Commercial Mortgage Backed Floating Rate Notes due 2014 C98,921,267 Class D Commercial Mortgage Backed Floating Rate Notes due 2014 On 24 October 2006 (or such other date as Fleet Street Finance Two P.L.C., a public company incorporated with limited liability under the laws of Ireland (the Issuer), the Lead Manager and the Co-Manager agree) (the Issue Date), the Issuer will issue the A780,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class A Notes), the A170,000,000 Class B Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class B Notes), the A143,100,000 Class C Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class C Notes) and the A98,921,267 Class D Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class D Notes, and, together with the Class A Notes, the Class B Notes and the Class C Notes, the Notes). Application has been made to the Irish Financial Services Regulatory Authority (the Financial Regulator), as competent authority under Directive 2003/71/EC (the Prospectus Directive), for this prospectus (the Prospectus) to be approved. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List of the Irish Stock Exchange (the Official List) and trading on its regulated market. Copies of this Prospectus have been filed and approved by the Financial Regulator as required by the Prospectus Directive (2003/71/EC) Regulations 2005 (the Prospectus Regulations). Upon approval of this Prospectus by the Financial Regulator, this Prospectus will be filed with the Companies Registration Office in Ireland in accordance with Regulation 38(1) (b) of the Prospectus Regulations. This Prospectus constitutes a prospectus for the purposes of the Prospectus Directive. On or about the Issue Date, the Issuer will apply the net proceeds of the issue of the Notes to purchase a senior term loan in the aggregate amount of A1,192,021,267 (the Loan) made by Goldman Sachs Credit Partners L.P. (the Originator) to Highstreet B Portfolio GbR (the Borrower) pursuant to an amended and restated senior facility agreement dated 30 June 2006, as further amended by an amendment agreement dated 5 September 2006 (as amended and restated, the Senior Facility Agreement), which is secured by, among other things, commercial properties situated in the Federal Republic of Germany (Germany). The Issuer will acquire the right to payment of interest payable on the Loan, other than the Retained Interest (which will be retained by the Originator, in that capacity and including any subsequent assignee, the Retained Interest Holder) and to the repayment of principal on the Loan. The Issuer will also acquire the benefit of the security for the Loan. Interest on the Notes will be payable quarterly in arrear in euro on 26 January, April, July and October in each year, subject to adjustment for non-business Days as described herein (each a Payment Date). The first Payment Date will be in January Unless previously redeemed in full, the Notes are expected to mature on the Payment Dates indicated in the table below (the Expected Maturity Date), and each Class of Notes will, in any event, mature no later than the Payment Date falling in July 2014 (the Final Maturity Date). Before the Expected Maturity Date and the Final Maturity Date, each Class of Notes will be subject to mandatory and/or optional redemption in whole or in part in certain circumstances (as set out in Condition 6 (Redemption and Cancellation) of the terms and conditions of the Notes (the Conditions)). The Notes and interest thereon will not be obligations or responsibilities of any person other than the Issuer. On issue it is expected that each Class of Notes will be assigned the respective ratings of Moody s Investor Service Limited (Moody s), Standard & Poor s Rating Services, a division of The McGraw-Hill Companies, Inc. (S&P) and Fitch Ratings Ltd (Fitch and together with Moody s and S&P, the Rating Agencies) set forth in the table below. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. CLASS INITIAL PRINCIPAL AMOUNT MARGIN OVER BASE INTEREST RATE (1) EXPECTED MATURITY DATE (2) FINAL MATURITY DATE (2) WEIGHTED AVERAGE LIFE (YEARS) (2) ISSUE PRICE EXPECTED RATINGS (FITCH/S&P/ MOODY S) A A780,000, per cent. January 2011 July per cent. AAA/AAA/Aaa B A170,000, per cent. January 2011 July per cent. AA/AA/NR C A143,100, per cent. January 2011 July per cent. A/A/NR D A98,921, per cent. January 2011 July per cent. BBB/BBB/NR 1. All of the Notes will bear interest at the rate equal to the European Interbank Offered Rate (EURIBOR) for three month euro deposits plus the margin specified above (other than in respect of the first Interest Period, the rate for which shall be determined by a linear interpolation of EURIBOR for three month and four month euro deposits). 2. Assuming, amongst other assumptions made herein, that the Issuer redeems the Notes upon the aggregate Principal Amount Outstanding of the Notes becoming less than 10 per cent. of their aggregate Principal Amount Outstanding on the Issue Date, the Issuer does not sell any assets and the Borrower meets its business plan. In any event the maturity date of the Notes of any Class may not be longer than the respective Final Maturity Date set forth above. The Notes will be limited recourse secured obligations of the Issuer only. The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act), or any State securities laws, and are subject to U.S. tax law requirements. The Notes are being offered by the Issuer only to persons who are not U.S. persons (as defined in Regulation S under the Securities Act (Regulation S)) in offshore transactions in reliance on Regulation S and in accordance with applicable laws. The Notes may not be offered or sold, directly or indirectly, in the United States or to, or for the account or benefit of, any U.S. persons except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act and applicable State securities laws. IF ANY WITHHOLDING OR DEDUCTION FOR OR ON ACCOUNT OF TAX IS APPLICABLE TO PAYMENTS OF INTEREST AND/OR REPAYMENTS OF PRINCIPAL ON ANY CLASS OF NOTES, SUCH PAYMENTS AND/OR REPAYMENTS WILL BE MADE SUBJECT TO SUCH WITHHOLDING OR DEDUCTION, WITHOUT THE ISSUER BEING OBLIGED TO PAY ANY ADDITIONAL AMOUNTS AS A CONSEQUENCE. The Notes of each class will each initially be represented on issue by a temporary global note in bearer form (each a Temporary Global Note) for such Class of Notes, without interest coupons attached. The Temporary Global Notes will be delivered on or about the Issue Date to a common safekeeper (the Common Safekeeper) for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg). Each Temporary Global Note will be exchangeable for interests in a permanent global note in bearer form (each a Permanent Global Note) representing the same Class of Notes, without interest coupons attached, not earlier than 40 days following the Issue Date (the Exchange Date) (provided that certification as to non-u.s. beneficial ownership has been received). Ownership interests in the Temporary Global Notes and the Permanent Global Notes (together the Global Notes) will be shown on, and transfer thereof will only be effected through, records maintained by Euroclear and Clearstream, Luxembourg and their respective participants. The Permanent Global Notes will be exchangeable for Definitive Notes in bearer form only in certain limited circumstances as set forth therein. The Notes will be governed by English law. Capitalised terms contained in this document and defined herein have the meaning given to them on the page indicated in the Index of Principal Definitions at page 240. A Risk Factors section is included in this Prospectus. Prospective Noteholders should be aware of the aspects of the issuance of the Notes that are described in that section. Each person contemplating making an investment in the Notes must make its own investigation and analysis of the creditworthiness of the Issuer and the Borrower and its own determination of the suitability of any such investment, with particular reference to its own investment objectives and experience and any other factors which may be relevant to it in connection with such investment. A prospective investor who is in any doubt whatsoever as to the risks involved in investing in the Notes should consult its own independent professional advisors. Prospectus dated 19 October ARRANGER AND LEAD MANAGER GOLDMAN SACHS INTERNATIONAL CO-MANAGER LEHMAN BROTHERS INTERNATIONAL (EUROPE)

2 IMPORTANT NOTICE THE NOTES AND INTEREST THEREON WILL BE OBLIGATIONS OF THE ISSUER ONLY. THE NOTES WILL NOT BE OBLIGATIONS OR RESPONSIBILITIES OF, NOR WILL THEY BE GUARANTEED BY, THE FINANCE PARTIES (OTHER THAN THE ISSUER), THE ARRANGER, THE MANAGERS, THE ORIGINATOR, THE RETAINED INTEREST HOLDER, THE SERVICER, THE SPECIAL SERVICER, THE NOTE TRUSTEE, THE ISSUER SECURITY TRUSTEE, THE CASH MANAGER, THE CORPORATE SERVICES PROVIDER, THE BORROWER SECURITY TRUSTEE, THE PAYING AGENTS, THE AGENT BANK, THE LIQUIDITY FACILITY PROVIDER, THE BASIS SWAP COUNTERPARTY OR THE ISSUER ACCOUNT BANK (AS EACH TERM IS DEFINED IN THIS PROSPECTUS) OR ANY COMPANY IN THE SAME GROUP OF COMPANIES AS ANY OF THEM. Responsibility Statement Save as discussed below, the Issuer (a Responsible Person for the purposes of the Prospectus Directive) accepts responsibility for all information contained in this Prospectus and, to the best of the knowledge and belief of the Issuer (who has taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. The delivery of this Prospectus at any time does not imply that the information contained in this Prospectus is correct at any time subsequent to the date of this Prospectus. The information relating to the Borrower, which is set out in the Summary, Risk Factors, Appendix 1 Borrower Information, Appendix 2 KarstadtQuelle AG, the Master Lessee and the Major Subtenants and Appendix 3 Leased Properties sections of this Prospectus, has been accurately reproduced from information made available by the Borrower and/or derived from the terms of the Loan and Related Security and/or which is publicly available. So far as the Issuer is aware and is able to ascertain from information published by the Borrower, no facts have been omitted which would render the reproduced information misleading. Goldman Sachs International accepts responsibility for the information contained in the section of this Prospectus entitled Goldman Sachs International having taken all reasonable care to insure that such is the case, insofar as the same relates to it. To the best of the knowledge and belief of Goldman Sachs International, the information contained in such section is in accordance with the facts and does not omit anything likely to affect its import. Any investment in Notes does not have the status of a bank deposit and is not within the scope of the deposit protection scheme operated by the Financial Regulator. The Issuer is not and will not be regulated by the Financial Regulator as a result of issuing the Notes. No person is or has been authorised to give any information or to make any representation in connection with the issue and sale of the Notes other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Issuer, the Borrower (or any companies in the same group of companies as, or affiliated to, the Borrower), the Finance Parties, the Arranger, the Managers (as defined in Subscription and Sale ), the Originator, the Retained Interest Holder, the Servicer, the Special Servicer, the Note Trustee, the Issuer Security Trustee, the Cash Manager, the Liquidity Facility Provider, the Corporate Services Provider, the Borrower Security Trustee, the Paying Agents, the Agent Bank, the Basis Swap Counterparty or the Issuer Account Bank or any of their respective affiliates or advisors. Neither the delivery of this Prospectus nor any sale, allotment or solicitation made in connection with the offering of the Notes shall, under any circumstances, create any implication or constitute a representation that there has been no change in the affairs of the Issuer, the Borrower (or any companies in the same group of companies as, or affiliated to, the Borrower) or in any of the information contained herein since the date of this Prospectus or that the information contained in this Prospectus is correct as of any time subsequent to its date. No person is or has been authorised in connection with the issue and sale of the Notes to give any information or to make any representation not contained in this Prospectus and, if given or made, 2

3 such information or representation must not be relied upon as having been authorised by or on behalf of the Issuer, the Originator, the Retained Interest Holder, the Managers, the Servicer, the Special Servicer, the Cash Manager, the Note Trustee, the Issuer Security Trustee, the Borrower Security Trustee, the Corporate Services Provider, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Basis Swap Counterparty or the Issuer Account Bank. Neither the delivery of this Prospectus nor any sale or allotment made in connection with the offering of any of the Notes will, under any circumstances, constitute a representation or create any implication that there has not been any change in the information contained herein since the date of this Prospectus or that the information contained in this Prospectus is correct as of any time subsequent to its date. This Prospectus may only be used for the purposes for which it has been prepared. Other than the approval by the Financial Regulator of this Prospectus as a prospectus in accordance with the requirements of the Prospectus Directive, no action has been or will be taken to permit a public offering of the Notes or the distribution of this Prospectus in any jurisdiction where action for that purpose is required. The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may be restricted by law. Persons receiving or obtaining this Prospectus or any part of this Prospectus are required by the Issuer and the Managers to inform themselves about, and to observe, any such restrictions. Neither this Prospectus nor any part of this Prospectus constitutes an offer of the Notes or an invitation by or on behalf of the Issuer or the Managers to subscribe for or purchase any of the Notes and neither this Prospectus, nor any part of this Prospectus, may be used for or in connection with an offer to, or solicitation by, any person in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. For a further description of certain restrictions on offers and sales of the Notes and distribution of this Prospectus or any part of this Prospectus see Subscription and Sale below. None of the Managers, the Note Trustee, the Issuer Security Trustee, the Borrower Security Trustee nor any of their respective affiliates has separately verified the information contained herein, and accordingly none of the Managers, the Note Trustee, the Issuer Security Trustee, the Borrower Security Trustee nor any of their respective affiliates makes any representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information contained herein or in any further information, notice or other document which may at any time be supplied in connection with the Notes or their distribution, or the future performance and adequacy of the Notes, and none of them accepts any responsibility or liability therefore. None of the Managers, the Note Trustee, the Issuer Security Trustee, the Borrower Security Trustee nor any of their respective affiliates undertakes to review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Prospectus nor to advise any investor or potential investor in the Notes of any information coming to their attention. The material contained on the web sites at the web addresses mentioned in this Prospectus do not form part of the information set out in this Prospectus. STABILISATION In connection with the issue of the Notes, Goldman Sachs International (the Stabilising Manager) or any person acting for it may over-allot Notes (provided that the aggregate principal amount of Notes allotted does not exceed 105 per cent. of the aggregate principal amount of the relevant Notes) or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager or any person acting for it will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days after the date of the allotment of the Notes. Any loss or profit sustained as a consequence of any such over-allotment or stabilising shall be for the account of Goldman Sachs International. 3

4 CAPITALISED TERMS USED IN THIS PROSPECTUS; CURRENCY REFERENCES; NUMERICAL INFORMATION From time to time capitalised terms are used in this Prospectus. Each of those capitalised terms has the meaning assigned to it in this Prospectus. An index of principal definitions is included at the end of this Prospectus for purposes of identifying where the definitions of certain capitalised terms are located. All references in this document to euro or A and to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community (signed in Rome on 25 March 1957), as amended. Prospective Noteholders should note that the information contained in this Prospectus with respect to the Loan is presented on the following basis: (a) all information unless otherwise specified, is stated as at the Cut Off Date; (b) all numerical information provided with respect to the Loan is provided on an approximate basis; and (c) where reference is made to, or calculation based on, the value of a Property, such value is based on the value attributed by the Initial Valuation to that Property. See The Loan and the Related Property Summaries. 4

5 TABLE OF CONTENTS Clause Page Summary 6 Risk Factors 36 The Loan and the Related Security 60 Description of the Loan and the Related Security and the Structure of the Accounts 60 Description of the Mezzanine Facility Agreement and Intercreditor Arrangements 100 Description of the Master Lease and the Permitted Subleases 107 Portfolio Due Diligence 115 The Loan and the Related Property Summaries 118 The Transaction Documents 128 The Loan Sale Agreement and Retained Interest Holder Intercreditor Deed 128 The Servicing Agreement 134 The Note Trust Deed 144 The Liquidity Facility Agreement 146 The Basis Swap Agreement 148 The Cash Management and Issuer Bank Account Agreement 151 Goldman Sachs International 159 The Issuer 160 Yield, Prepayment and Maturity Considerations 162 Summary of the Provisions Relating to the Notes while in Global Form 167 Terms and Conditions of the Notes 169 Certain Matters of German Law 199 Certain Matters of Dutch Law 206 Use of Proceeds 207 Fees and Expenses 208 Irish Taxation 209 German Taxation 211 Subscription and Sale 214 General Information 217 Appendix 1. Borrower Information KarstadtQuelle AG, the Master Lessee and the Major Subtenants Details of Properties Term Sheet Index of Principal Definitions 239 5

6 SUMMARY The following information is a summary of the principal features of the issue of the Notes. This summary does not purport to be complete and is taken from, and is qualified in its entirety by reference to the detailed information appearing elsewhere in the Prospectus and, in relation to the terms and conditions of the Notes, the Conditions. Prospective purchasers of the Notes are advised to read carefully, and to rely solely on, the detailed information appearing elsewhere in this Prospectus in making any decision whether or not to invest in any Notes. Capitalised terms used, but not defined, in this section can be found elsewhere in this Prospectus, unless otherwise stated. An index of defined terms is set out at the end of this Prospectus. This summary constitutes a general description of the Notes for the purpose of Article 22.5(3) of Commission Regulation (EC) No. 809/2004 implementing the Prospectus Directive. 1. INTRODUCTION TO THE TRANSACTION On the Issue Date, the Issuer will issue the Notes and with the net proceeds of such issuance (being an aggregate initial principal amount of A1,192,021,267) will acquire from the Originator, pursuant to the terms of a loan sale agreement to be entered into between them, amongst others, on or prior to the Issue Date (the Loan Sale Agreement), the Loan excluding the right to receive Retained Interest (which will be retained by the Originator). The Loan is secured by, among other things, a portfolio of commercial properties located in Germany (each a Property and collectively, the Properties or the Portfolio). The Issuer will also acquire the benefit of security granted by the Borrower or other obligors as security for the Loan (the Related Security). The Loan (together with the Related Security) has an initial purchase price of A1,192,021,267 which is equal to the outstanding principal balance of the Loan as at the Issue Date. The aggregate market value of the Properties is set out below in Risk Factors Factors Relating to the Properties Limitations of Valuations below. The Properties are more fully described below in The Loan and Related Property Summaries. The Portfolio consists of 109 Properties which have been or are being acquired by the Borrower from subsidiaries of KarstadtQuelle AG pursuant to the Real Property Purchase Agreement. As at the date of this Prospectus the conditions precedent to the closing of the sale of 92 Properties have been fulfilled and their sale to the Borrower has taken place. The details of these properties are set out in Appendix 4. For further information concerning the Real Property Purchase Agreement see Transfer of the Properties to the Borrower in Appendix 1. As at 11 October 2006 Land Charges over 70 Properties have been registered and, in respect of the remaining Properties, registration of Land Charges has been applied for in respect of all but 15. In respect of all Properties the sale of which has been completed, Land Charges have been registered or registration applied for. These Land Charges will be first-ranking after all prior-ranking encumbrances in Division III of the relevant land register have been deleted. In respect to the registration of transfer of ownership in the Properties (in respect of which sale to the Borrower has been completed), registration has been applied for in respect of all but 25 Properties and has been completed in respect of eight Properties. The obligations of the Issuer under the Notes and to the other Issuer Secured Creditors will be secured pursuant to the terms of the Issuer Deed of Charge and Assignment and the German Security Assignment Agreement. The Issuer will use receipts of principal and interest (other than the Retained Interest) in respect of the Loan together with certain other funds available to it (as described elsewhere in this Prospectus) to make payments of, among other things, principal and interest due in respect of the Notes. The Notes will constitute a single series of notes, designated the Fleet Street Finance Two P.L.C. Commercial Mortgage Backed Floating Rate Notes, consisting of multiple classes. The table below identifies the respective classes of the Notes and specifies various characteristics of each class of the Notes. 6

7 2. PRINCIPAL FEATURES OF THE NOTES The following is a brief overview of the principal characteristics of the Notes referred to in this Prospectus. This information is subject to, and is more fully explained in, the other sections of this Prospectus. Notes Class A Notes Class B Notes Class C Notes Class D Notes Initial Principal Amount A780,000,000 A170,000,000 A143,100,000 A98,921,267 Issue price 100% 100% 100% 100% Interest rate 1 EURIBOR % per annum EURIBOR % per annum EURIBOR % per annum EURIBOR % per annum Expected Maturity Date 23 January 2011 January 2011 January 2011 January 2011 Final Maturity Date 2 July 2014 July 2014 July 2014 July 2014 Weighted average life years 3.0 years 3.0 years 3.0 years Day count Actual/360 Business Day convention/ Business Days Payment Dates Form of Notes Denomination Clearing system Credit enhancement (provided by other Classes of Notes subordinated to the relevant Class) Modified following/london, Dublin, Frankfurt and Amsterdam and TARGET Days Quarterly on 26 January, 26 April, 26 July and 26 October] Bearer A50,000 (or an integral multiple of A1,000 in excess thereof in the case of the Class A Notes, Class B Notes and Class C Notes, or an integral multiple of A1 in excess thereof in the case of the Class D Notes). Euroclear and Clearstream, Luxembourg Subordination of the Class B Notes, Class C Notes and Class D Notes Subordination of the Class C Notes and Class D Notes Subordination of the Class D Notes No subordination / credit enhancement Listing Irish Stock Exchange regulated market ISIN XS XS XS XS Common Code Expected rating -Fitch AAA AA A BBB Expected rating Moody s Aaa NR NR NR Expected rating S&P AAA AA A BBB Intended to be held in a manner which would allow Eurosystem eligibility Yes. Note that the designation yes simply means that the Notes are intended upon issue to be deposited with one of the international central securities depositaries as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon satisfaction of the Eurosystem eligibility criteria. 1. All of the Notes will bear interest at the rate equal to EURIBOR for three month euro deposits plus the margin specified above (other than in respect of the first Interest Period, the rate for which shall be determined by a linear interpolation of EURIBOR for three month and four month euro deposits). 2. Based on the assumptions set out in Yield, Prepayment and Maturity Considerations, to which investors should refer, the current expected maturity date of each Class of Notes is the Expected Maturity Date set forth above. In any event, the maturity date of any Class may not be longer than the respective Final Maturity Date set forth above. 3. Based on the assumption that the Issuer exercises its option to redeem the Notes upon the aggregate Principal Amount Outstanding becoming less than 10% of their Principal Amount Outstanding on the Issue Date. 7

8 3. PARTIES TO THE TRANSACTION Issuer: Fleet Street Finance Two P.L.C. (the Issuer), a public company incorporated with limited liability in Ireland with registration number , whose registered office is at 5 Harbourmaster Place, IFSC, Dublin 1, Ireland. The entire issued share capital of the Issuer is held by or on behalf of Deutsche International Finance (Ireland) Limited on trust for charitable purposes. Originator and Retained Interest Holder: Borrower: Facility Agent: Borrower Security Trustee: Issuer Security Trustee: Note Trustee: Servicer: Goldman Sachs Credit Partners L.P., a limited partnership registered in Bermuda with its principal office at 85 Broad Street, New York, New York, U.S.A., in its capacity as original lender under the Senior Facility Agreement relating to the Loan (the Originator). Highstreet B Portfolio GbR (the Borrower) as described in Appendix 1 Borrower Information. Capmark Services Ireland Limited a limited liability company incorporated under the laws of Ireland with its registered office at Clanmore, Mullinger, Co. Westmeath, Ireland (the Facility Agent) will act as facility agent under the Senior Facility Agreement. ABN AMRO Trustees Limited in its capacity as the borrower security trustee and trustee for the Finance Parties (the Borrower Security Trustee) in respect of the Related Security (a) governed by German law pursuant to the joint security trust agreement dated 6 September 2006 among the Originator, the Original Mezzanine Lender, the Facility Agent, the Borrower Security Trustee and the Loan Arranger (the Joint Security Trust Agreement), and (b) governed by English law, pursuant to the security trust deed to be dated on or about the Issue Date, among the Originator, the Original Mezzanine Lender, the Facility Agent, the Borrower Security Trustee and the Loan Arranger (the Loan Security Trust Deed). Deutsche Trustee Company Limited, a limited liability company incorporated in England, whose registered office is at Winchester House, 1 Great Winchester Street, London EC2N 2DB will hold on trust for itself and the other Issuer Secured Creditors (in such capacity, the Issuer Security Trustee) the security granted by the Issuer in favour of the Issuer Secured Creditors pursuant to (a) a deed of charge and assignment governed by English law (the Issuer Deed of Charge and Assignment) and (b) a security assignment agreement governed by German law (the German Security Assignment Agreement), in each case to be dated the Issue Date. Deutsche Trustee Company Limited will act as trustee (the Note Trustee) for the holders of the Notes pursuant to the terms of a note trust deed to be dated on or about the Issue Date (the Note Trust Deed) between the Note Trustee and the Issuer. Capmark Services Ireland Limited and Capmark Services UK Limited will act jointly (subject as otherwise mentioned in the section The Loan and the Related Security The Servicing Agreement ) as the servicer (together the Servicer) and will carry out certain servicing functions on behalf of the Issuer in connection with the Loan and the Related Security. Both entities are specialists in the loan servicing business. Capmark Services Ireland Limited is a limited liability company incorporated under the laws of Ireland with registered number and operates out of its registered 8

9 Special Servicer: Cash Manager: Issuer Account Bank: Principal Paying Agent and Agent Bank: office at Clonmore, Mullingar, Co. Westmeath, Ireland. Capmark Services UK Limited is a limited liability company organised under the laws of England and Wales with registered number and operates out of its registered office at Norfolk House, 31 St. James s Square, London SW1Y 4JJ, United Kingdom. As at the date hereof, Capmark Services Ireland Limited was rated CPS1 minus by Fitch and Strong by S&P and Capmark Services UK Limited was rated CSS2 minus by Fitch and Above Average by S&P. Capmark Services UK Limited, whose registered office is located at Norfolk House, 31 St James s Square, London SW1Y 4JJ, will be appointed as special servicer (the Special Servicer) to carry out certain special servicing functions on behalf of the Issuer in connection with the Loan and the Related Security. Deutsche Bank AG, London Branch will be the cash manager to the Issuer (in such capacity, the Cash Manager) pursuant to the terms of a cash management and issuer account bank agreement to be dated on or about the Issue Date (the Cash Management and Issuer Account Bank Agreement) between, among others, the Issuer, the Issuer Security Trustee and the Cash Manager. The Cash Manager will, subject to the terms of the Cash Management and Issuer Account Bank Agreement, on behalf of the Issuer, manage the Issuer Accounts, determine the amounts of and arrange payments to be made by the Issuer and keep certain records on the Issuer s behalf. Deutsche Bank AG, London Branch will be the account bank to the Issuer (in such capacity, the Issuer Account Bank) pursuant to the terms of the Cash Management and Issuer Account Bank Agreement. Pursuant to the terms of the Cash Management and Issuer Account Bank Agreement, the Issuer Account Bank will provide certain banking services to the Issuer in relation to the accounts to be opened with the Issuer Account Bank in the name of the Issuer (the Issuer Accounts). The Issuer Account Bank is required to have a short-term rating of at least F1+ from Fitch, P-1 from Moody s and A-1+ from S&P. Deutsche Bank AG, London Branch will be appointed to act as principal paying agent and agent bank in respect of the Notes (in such capacities, the Principal Paying Agent and the Agent Bank) pursuant to the terms of an agency agreement in respect of the Notes to be dated on or about the Issue Date (the Agency Agreement) between the Issuer, the Note Trustee, the Issuer Security Trustee, the Agent Bank, the Principal Paying Agent and the Irish Paying Agent. Irish Paying Agent: Deutsche International Corporate Services (Ireland) Limited, whose registered office is at 5 Harbourmaster Place, International Financial Services Centre, Dublin 1, Ireland will be appointed to act as Irish paying agent pursuant to the terms of the Agency Agreement (in such capacity, the Irish Paying Agent and together with the Principal Paying Agent and any other person appointed as a paying agent in accordance with and pursuant to the terms of the Agency Agreement, the Paying Agents). Pursuant to the terms of the Agency Agreement, the Paying Agents will make payments on behalf of the Issuer of principal and interest on the Notes. 9

10 Basis Swap Counterparty: Liquidity Facility Provider: Issuer Secured Creditors: Goldman Sachs Mitsui Marine Derivative Products, L.P. will be the basis swap counterparty (the Basis Swap Counterparty) pursuant to the terms of a hedging agreement in the form of an International Swaps and Derivatives Association, Inc. (ISDA) 1992 Master Agreement (Multicurrency-Cross Border) and Schedule thereto to be dated on or prior to the Issue Date (the Basis Swap Agreement) with the Issuer. Lloyds TSB Bank plc, acting through its office at 10 Gresham Street, London EC2V 7AE, will act as the committed facility provider (the Liquidity Facility Provider) pursuant to the terms of a committed facility agreement to be dated on or about the Issue Date (the Liquidity Facility Agreement) between the Liquidity Facility Provider, the Issuer and the Issuer Security Trustee. The Issuer will be required to maintain a liquidity facility with a bank which has a rating assigned to its short-term unsecured, unsubordinated and unguaranteed debt obligations of which are rated F1 by Fitch, P-1 by Moody s and A-1+ by S&P (the Minimum Liquidity Facility Provider Ratings). If the Liquidity Facility Provider ceases to have the Minimum Liquidity Facility Provider Ratings, the Issuer shall make arrangements for a new liquidity facility provider which has the Minimum Liquidity Facility Provider Ratings to enter into a new liquidity facility agreement on substantially the same terms as the Liquidity Facility Agreement. See the section entitled The Transaction Documents The Liquidity Facility Agreement below. As applicable in the relevant context, each of the Noteholders, the Note Trustee, the Issuer Security Trustee, any appointee of either the Note Trustee or the Issuer Security Trustee, any receiver appointed pursuant to the terms of the Issuer Deed of Charge and Assignment, the Corporate Services Provider, the Servicer, the Special Servicer, the Cash Manager, the Liquidity Facility Provider, the Basis Swap Counterparty, the Paying Agents, the Agent Bank, the Issuer Account Bank, the Originator and the Retained Interest Holder. Corporate Services Provider: Deutsche International Corporate Services (Ireland) Limited, whose registered office is at 5 Harbourmaster Place, International Financial Services Centre, Dublin 1, Ireland, will be the corporate services provider (the Corporate Services Provider) and will provide certain administrative services to the Issuer, pursuant to the terms of a corporate services agreement to be dated on or about the Issue Date (the Corporate Services Agreement) between the Corporate Services Provider, the Issuer Security Trustee and the Issuer. Finance Parties: Master Lessee: The Finance Parties under the Senior Facility Agreement include the Originator and any person which becomes party to the Senior Facility Agreement as a lender, which in each case has not ceased to be a party thereunder (each a Lender), the Facility Agent, the Borrower Security Trustee and Goldman Sachs International in its capacity as arranger under the Senior Facility Agreement. The Finance Parties will include the Issuer following the sale of the Loan to the Issuer on the Issue Date. W2005/Seven BV, a limited liability company established under the laws of the Netherlands whose registered office is at Strawinskylaan 1207, 1077xx Amsterdam, The Netherlands, is the master lessee 10

11 under the Master Lease (the Master Lessee). For further information see Appendix 2 KarstadtQuelle AG, the Master Lessee and the Major Subtenants. Major Subtenants: Karstadt Warenhaus GmbH, a limited liability company established under the laws of Germany whose registered office is at Theodor-Althoff-Strasse 2, Essen, Germany and Quelle GmbH, a limited liability company established under the laws of Germany, whose registered office is at Nürnberger Strasse 91-95, Fürth, Germany, are the subtenants under the two Permitted Subleases (the Major Subtenants). For further information see Appendix 2 KarstadtQuelle AG, the Master Lessee and the Major Subtenants. 4. RELEVANT DATES AND PERIODS Issue Date: The Notes will be issued on or about 24 October 2006 (or such later date as the Issuer, Goldman Sachs International as Lead Manager and Arranger and Lehman Brothers International (Europe) as Co- Manager may agree) (the Issue Date). Cut-Off Date: 1 September 2006 (the Cut-Off Date). Final Maturity Date: Unless previously redeemed in full, the Issuer will redeem the Notes in full (together with all interest accrued thereon) on the Payment Date falling in July 2014 (the Final Maturity Date). Payment Date: Each Note will bear interest on its Principal Amount Outstanding from, and including, the Issue Date. Interest will be payable on the Notes quarterly in arrear on 26 January, 26 April, 26 July and 26 October in each year (or, if such day is not a Business Day, the next following Business Day) (each a Payment Date) in respect of the Interest Period ending immediately prior thereto. The first Payment Date in respect of the Notes will be the Payment Date falling in January Loan Payment Date: The payment dates for the Loan (each a Loan Payment Date) are the 20th day of each of January, April, July and October in each year and the Loan Final Maturity Date or, if any such day is not a Business Day, the next Business Day in the case of a Loan Payment Date or the immediately preceding Business Day in the case of the Loan Final Maturity Date. Business Day: Any day other than a Saturday, Sunday or day on which banks are not open for interbank business in London, Amsterdam, Dublin or Frankfurt which is also a TARGET Day. TARGET Day: A day on which the Trans-European Automated Real-Time Gross Settlement Express System is open for settlement payments in euro. Determination Date: Two Business Days prior to each Payment Date, except in respect of the Payment Date which is the Final Maturity Date when such date will be the Final Maturity Date (each such day, a Determination Date), the Cash Manager will, based on information relating to collections on the Loan received from the Servicer, perform calculations in respect of the immediately preceding Collection Period and payments to be made to, among others, the holders of the Notes (the Noteholders) in accordance with the relevant Priority of Payments on such Payment Date. The Determination Date is the date by which the Servicer will be required to identify, among other things, the sources and allocation of the amounts received in respect of the Loan. 11

12 Collection Period: Amounts available for payment on the Notes on any Payment Date will depend on the payments and other collections received with respect to the Loan during the applicable Collection Period, the payments received with respect to the Basis Swap Agreement for the applicable Collection Period including, for the avoidance of doubt, payments which relate to that Collection Period but which are received after that collection period but on or prior to the immediately following Determination Date and any Liquidity Drawings relating to such Payment Date with respect to the Notes. Each Collection Period will. (a) (b) (c) relate to the Payment Date immediately following such Collection Period. start from (and include) the preceding Loan Payment Date (or in the case of the first Collection Period, the Issue Date); and end on (but exclude) the Loan Payment Date that occurs in the same month as the immediately following Payment Date. Interest Period: Interest Determination Date: Interest on the Notes is payable by reference to successive interest periods (each an Interest Period). The first Interest Period will commence on (and include) the Issue Date and end on (but exclude) the Payment Date falling in January Each successive Interest Period will commence on (and include) the next (or first) Payment Date and end on (but exclude) the following Payment Date. The rate of interest applicable to each Note for each Interest Period will be calculated and set on, in respect of the first Interest Period, two TARGET Days prior to the Issue Date and, in respect of all subsequent Interest Periods, two TARGET Days prior to the first day of each such Interest Period (each an Interest Determination Date). 5. THE LOAN Parties to the Loan: Purpose: Rate of Interest: Pursuant to the Senior Facility Agreement, the Originator made available to the Borrower a term loan facility for the Senior Facility Amount. On 3 July 2006, the Borrower drew down a loan in the aggregate amount of A877,596, (the Initial Drawdown) and on 31 August 2006 the Borrower drew down a loan in the aggregate amount of A317,966, (the Second Drawdown and together with the Initial Drawdown, in the amount of A1,195,562,471 the Loan). The Borrower applied the proceeds of the Loan to finance or refinance the acquisition of the Properties, to pay fees, costs and expenses relating to the Loan and Related Security and to fund capital expenditures of the Borrower under the Maser Lease. The rate of interest payable on the Loan for each Loan Interest Period is calculated as the sum of EURIBOR plus a margin plus Mandatory Costs (if any). For a more detailed description of the interest rate, see The Loan and the Related Security. On the Issue Date the Originator will assign to the Issuer all rights to receive interest on the Loan other than the right to receive Retained Interest, which will be retained by the Retained Interest Holder. 12

13 Repayment: Prepayment: Interest Coverage Ratio: The Borrower must repay the Loan in full on the Loan Final Maturity Date, subject to the various provisions in the Senior Facility Agreement regarding repayment or prepayment in whole or in part (including provisions regarding scheduled amortisation). The Borrower must prepay the Loan, in whole or in part, as applicable, in the following circumstances: (a) if it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations under the Senior Facility Agreement or maintain its participation in the Loan; (b) if required by the Majority Lenders following a Change of Control; or (c) upon a Disposal of any Property (in which case prepayment shall be through application of Disposal Proceeds deposited in the Sales Account on the date of such disposal). The Borrower may voluntarily prepay the Loan, in whole or in part, upon six Business Days prior notice. If the Borrower makes any prepayment, prepayment fees will be payable by the Borrower in certain circumstances as agreed between the Borrower and the Originator. All prepayments must be made with accrued interest on the amount prepaid, together with Break Costs and Mandatory Costs (if any). For a more detailed description of the provisions of the Senior Facility Agreement regarding prepayment of the Loan see The Loan and the Related Security Description of the Loan and the Related Security and the Structure of Accounts below. See further Risk Factors Factors relating to the Notes Liability under the Notes below. The Borrower covenants that the interest coverage ratio (as determined in accordance with the Senior Facility Agreement, the ICR) shall not be less than 135 per cent. as of two consecutive Loan Payment Dates. See further The Loan and the Related Security Description of the Loan and the Related Security and the Structure of Accounts. A Cash Trap Period (which, among other things restricts payments that can be made to the Mezzanine Facility Agent and the General Account, payments that can be made out of the Portfolio B Capital Maintenance Account and the ability of the Borrower to make distributions to equity holders) will commence on any Loan Payment Date as of which ICR is less than 150 per cent., and will terminate on the next following Loan Payment Date as of which the ICR is 150 per cent. or greater. Loan to Value: The Borrower covenants that the loan to value ratio (as determined in accordance with the Senior Facility Agreement, the LTV) is not greater than 70 per cent. on any relevant test date. If the test is not satisfied, the Borrower must prepay the Loan, or make a prepayment to bring the LTV to 70 per cent., otherwise a breach of this covenant shall constitute a Loan Event of Default. See further The Loan and the Related Security Description of the Loan and the Related Security and the Structure of Accounts. The Related Security: The obligations of the Borrower under the Senior Finance Documents are secured pursuant to the security (the Related Security) created by, and administered pursuant to, the Senior 13

14 * Sale of this Property is not yet completed. Property is currently cash collateralised. Security Documents. The Related Security includes the following (each a Senior Security Document and collectively the Senior Security Documents): (a) a first-ranking pledge over all partnership interests in the Borrower pursuant to the Borrower Pledge Agreement; (b) a first-ranking pledge over all Shares in JV Holding BV pursuant to the JV Holding Pledge Agreement; (c) a first-ranking pledge over all Shares in the Master Lessee pursuant to the Master Lessee Pledge Agreement; (d) first-ranking pledges over the General Account, the Rent Account, the Sales Account, the Junior Reserve Account and the Cash Collateral Account pursuant to the Borrower Account Pledge Agreements; (e) a first ranking pledge over the B Portfolio Rent Account pursuant to the Borrower and Master Lessee Account Pledge Agreements (items (a) through (e), inclusive, are the Pledges); (f) first-ranking uncertificated land charges over the Properties created by the Land Charges, provided that the Land Charges granted in respect of the Property situated at Wandererstrasse 159 in Nürnberg may rank junior to certain other existing land charges; (g) security purpose agreement among the Borrower Security Trustee, also acting as Borrower Security Trustee under the Mezzanine Facility Agreement, the Borrower, the Parent and their respective partners relating to the Properties and the Land Charges; (h) one or more declarations of assignment relating to the assignment to the Borrower Security Trustee in full of each of the existing land charges over the Property located in Offenburg, Lindenplatz 3*, as well as an enforceable counterpart (vollstreckbare Ausfertigung) of the submittal to the immediate enforcement (Unterwerfung unter die sofortige Zwangsvollstreckung) in the full nominal amount of each such land charge (item (f) through (h), inclusive, are the Land Charges); (i) a security assignment of the Borrower s rights: (i) under the Master Lease with respect to the Properties, under easements (Dienstbarkeiten) and rights of use (Nießbräuche) granted to the sublessees pursuant to or in connection with the Permitted Subleases, under the Dritte Leases and any hereditary building rights granted with respect to the Properties, pursuant to the Assignment of Leases; (ii) under the Acquisition Documentation and all future sales proceeds generated by Disposals of the Properties, pursuant to the Assignment of Acquisition Documentation; (iii) as beneficiary under the insurance contracts required under the Senior Facility Agreement with respect to the Properties (other than any insurance required under the 14

15 Senior Facility Agreement against product and third party and public liability risks), pursuant to the Assignment of Insurance; and (iv) under any applicable Asset Management Services Agreement and/or Facilities Management Services Agreement, pursuant to the Borrower Assignment of Services Agreements; (j) a security assignment of the Master Lessee s rights: (i) under the Permitted Subleases to the extent such Permitted Subleases pertain to the Properties, pursuant to the Master Lessee Assignment of Permitted Subleases; and (ii) under any applicable Asset Management Services Agreement and/or Facilities Management Services Agreement, pursuant to the Master Lessee Assignment of Services Agreements; and (k) an assignment by way of security of the Borrower s rights under the Hedge Documents pursuant to the Assignment of Hedge Documents (items (i) through (k) are, inclusive, the Assignment Agreements. Additionally, a share mortgage under Irish law (the Irish Share Mortgage) has been granted by the Borrower to the Borrower Security Trustee over shares acquired in Eligible Investments from the Cash Colleral Account. The pledges created pursuant to the Pledge Agreements are the accessory security rights (akzessorische Sicherheiten). The Land Charges and the security assignments created pursuant to the Assignment Agreements (other than the Assignment of Hedge Documents) are the non-accessory security rights (nicht akzessorische Sicherheiten). ABN AMRO Trustees Limited in its capacity as the borrower security trustee for the Finance Parties (the Borrower Security Trustee) will, pursuant to the Joint Security Trust Agreement, administer the accessory security rights granted by the Borrower and other obligors in favour of the Finance Parties (including the Issuer, following the sale of the Loan from the Originator to the Issuer) pursuant to the Pledges. In addition, the Borrower Security Trustee will, pursuant to the Joint Security Trust Agreement, hold and administer the non-accessory security rights created pursuant to the Land Charges and the Assignment Agreements (other than the Assignment of Hedge Documents), as well as any accessory security securing rights granted to the Borrower Security Trustee as a Finance Party. Furthermore, the Borrower Security Trustee will hold the security assigned by the Assignment of Hedge Documents, as well as the Pledges, the Land Charges, the Assignment Agreements and the Irish Share Mortgage on trust for the Finance Parties (including the Issuer following the sale of the Loan from the Originator to the Issuer) pursuant to the Loan Security Trust Deed. The Borrower Security Trustee will delegate substantially all of its duties and discretions as Borrower Security Trustee to the Servicer and, as applicable, the Special Servicer under the Servicing Agreement. 15

16 Acquisition of the Loan: Representations and Warranties: Servicer: Special Servicer: On the Issue Date, the Issuer will issue the Notes and with the net proceeds of such issue will acquire the Loan (excluding the right to receive Retained Interest) from the Originator pursuant to the terms of the Loan Sale Agreement. The Originator will give notice to the Borrower of the sale of the Loan from the Originator to the Issuer. See further The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Deed. The Loan Sale Agreement contains certain representations and warranties given by the Originator in relation to the Loan and the Related Security. These representations and warranties are described under The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Deed Representations and Warranties of the Originator. If there has been a material breach of a representation or warranty in relation to the Loan or the Related Security and such breach is not capable of remedy or, if capable of remedy, has not been remedied within the time specified in the Loan Sale Agreement then the Originator will be required to either (a) repurchase the Loan or (b) indemnify the Issuer to its satisfaction, as described below in The Transaction Documents The Loan Sale Agreement and Retained Interest Holder Intercreditor Deed Representations and Warranties of the Originator. Capmark Services Ireland Limited and Capmark Services UK Limited will be appointed to act jointly (subject as otherwise mentioned in The Transaction Documents The Servicing Agreement ) as Servicer pursuant to the terms of a servicing agreement (the Servicing Agreement) to be entered into on the Issue Date between, among others, the Issuer, the Servicer, the Special Servicer, the Facility Agent, the Issuer Security Trustee and the Borrower Security Trustee. The Servicer will service and administer the Loan and the Related Security in the ordinary course, including making certain calculations and preparing reports in respect of the Loan and the Properties. The Servicer will, subject to the terms of the Servicing Agreement, receive an annual fee payable quarterly in arrear on each payment date (the Servicing Fee) equal to per cent. per annum (plus VAT, if any) of the outstanding principal balance of the Loan at the beginning of the Loan Interest Period relating to such Payment Date. See The Transaction Documents The Servicing Agreement Servicing Fee, Special Servicing Fee, Liquidation Fee and Workout Fee. Capmark Services UK Limited will be appointed as Special Servicer pursuant to the Servicing Agreement. The Special Servicer will formally assume special servicing duties in respect of the Loan and the Related Security, and the Loan and the Related Security will become a Specially Serviced Loan, on the occurrence of a Special Servicing Transfer Event (which includes, among other things, the occurrence of a payment default on the Loan on the Loan Final Maturity Date or a payment default by the Borrower that is more than 45 days overdue and certain other events). The Loan will cease to be a Specially Serviced Loan and will become a Corrected Loan if the events giving rise to it becoming a Specially Serviced Loan are cured. See The Transaction Documents The Servicing Agreement below. 16

17 Controlling Class and Operating Advisor: Property Protection Advances: The Special Servicer will be entitled to be paid, in accordance with the terms of the Servicing Agreement: (i) a fee (the Special Servicing Fee) equal to 0.18 per cent. per annum (plus VAT, if any) of the outstanding principal amount of the Loan, for each day the Loan is designated as a Specially Serviced Loan and which is payable in addition to the Servicing Fee; (ii) a liquidation fee (the Liquidation Fee) equal to 0.65 per cent. per annum (plus VAT, if any) of the proceeds of sale, net of costs and expenses of sale, if any, arising from the sale of the Loan or any of the Properties following the enforcement of the Related Security provided the Loan is designated as a Specially Serviced Loan; and (iii) a workout fee (the Workout Fee) equal to 0.65 per cent. (plus VAT, if any) of each collection of interest and principal received on the Loan, for so long as it remains a Corrected Loan, if the Loan becomes a Specially Serviced Loan and then subsequently becomes a Corrected Loan. See The Transaction Documents The Servicing Agreement Servicing Fee, Special Servicing Fee, Liquidation Fee and Workout Fee. The most junior Class of Notes outstanding shall be the Controlling Class if at the relevant time it meets the Controlling Class Test. A Class of Notes will meet the Controlling Class Test if it has a total Principal Amount Outstanding which is not less than 25 per cent. of the Principal Amount Outstanding of such Class of Notes on the Issue Date. If the most junior Class of Notes outstanding does not meet the Controlling Class Test, the next most junior Class of Notes outstanding that does meet the Controlling Class Test will be the Controlling Class. If no Class of Notes has a Principal Amount Outstanding that satisfies the Controlling Class Test then the Controlling Class will be the most junior class of Notes then outstanding. For the avoidance of doubt, the Principal Amount Outstanding of a Class of Notes for the purposes of calculating the Controlling Class Test shall be the Principal Amount Outstanding of such Class less any Appraisal Reduction Amounts that have been applied to that Class. The Note Trustee shall determine which Class of Notes meets the Controlling Class Test and shall notify the Servicer and the Special Servicer accordingly. The Controlling Class will have the right to appoint an advisor (the Operating Advisor) to represent its interests when the Servicer or the Special Servicer is acting in relation the Loan. The appointment of the Operating Advisor will be deemed effective upon notification by it of its appointment to the Note Trustee to the Issuer, the Issuer Security Trustee, the Servicer and the Special Servicer. The Operating Advisor will, subject to certain conditions being met, be entitled to require the Issuer to replace the Special Servicer and will have certain rights with respect to certain material actions relating to the Loan. See The Transaction Documents The Servicing Agreement Operating Advisor. The Senior Facility Agreement obliges the Borrower to pay certain amounts to third parties, such as insurers and persons providing services in connection with the operation of the Properties. If: (a) the Borrower fails to pay any such amount (and there are insufficient funds available in the relevant Borrower Accounts to pay it); (b) the Senior Facility Agreement entitles the Issuer as lender to pay or discharge the obligation to the third party; (c) the Senior Facility Agreement requires the Borrower to reimburse the 17

18 Issuer as lender for any payments so made; (d) the Servicer or, as applicable, the Special Servicer is satisfied that such amounts will, in addition to all other amounts due, be recoverable from the relevant Borrower; and (e) the Servicer or, as the case may be, the Special Servicer, is otherwise satisfied that it would be in accordance with the Servicing Standard to do so, the Servicer or Special Servicer, as the case may be, may at its sole discretion make the relevant third party payment (any such payment being a Property Protection Advance) from its own funds. If the Servicer or the Special Servicer makes a Property Protection Advance from its own funds, it will be repaid by the Issuer in accordance with the Pre-Enforcement Priority of Payments or the Post-Enforcement Priority of Payments, as applicable, (subject to the Issuer having sufficient funds) together with interest thereon at EURIBOR plus the Liquidity Margin (the Reimbursement Rate) on the Payment Date immediately following the date on which such Property Protection Advance was made. 6. THE INTERCREDITOR DEED BETWEEN THE ORIGINATOR AND THE ISSUER The Retained Interest Holder Intercreditor Deed: On the Issue Date, the Originator, the Issuer, the Issuer Security Trustee and the Borrower Security Trustee will enter into an intercreditor deed (the Retained Interest Holder Intercreditor Deed) which will regulate the rights of the Originator (in its capacity as original Retained Interest Holder) and the Issuer as regards the payment of Retained Interest. For further information, see The Transaction Documents The Loan Sale Agreement and Retained Interest Holder Intercreditor Deed below. 7. THE MEZZANINE LOAN AND THE LOAN INTERCREDITOR AGREEMENT Mezzanine Facility Agreement: Pursuant to an amended and restated mezzanine facility agreement dated 30 June 2006 as amended by an amendment agreement dated 5 September 2006 (as amended and restated, the Mezzanine Facility Agreement) among Highstreet Holding GbR, as mezzanine borrower (the Mezzanine Borrower), Highstreet A Portfolio GbR (Highstreet A and together with the Borrower, the Mezzanine Facility Guarantors), Goldman Sachs Credit Partners L.P., as the original mezzanine lender (the Original Mezzanine Lender), Goldman Sachs International, as the arranger of the Mezzanine Loan (the Mezzanine Loan Arranger), the Facility Agent and the Borrower Security Trustee, the Original Mezzanine Lender advanced to the Mezzanine Borrower a loan in the amount of A1,465,673,480 (with an available facility of up to A1,470,200,750) by 31 August 2006 of which A416,842,345 was allocated to the 109 Properties. As at the Issue Date, A415,607,676 is expected to be allocated to the 109 Properties after the scheduled amortisation due on 20 October The Borrower (along with Highstreet A) guarantees to each Mezzanine Finance Party the punctual performance of all the Mezzanine Borrower s obligations under the Mezzanine Finance Documents. The Mezzanine Facility Agreement is governed by German law and amends and restates the mezzanine facility agreement dated 27 March 2006 among the parties to the Mezzanine Facility Agreement. 18

19 For further information see: The Loan and the Related Security Description of the Mezzanine Facility Agreement and the Loan Intercreditor Arrangements The Mezzanine Facility Agreement below. Common Security Agreements: Loan Intercreditor Arrangement: The Common Security Agreements are the following Senior Security Documents relating to assets which secure both the Loan and the Mezzanine Loan: (a) the Land Charges; (b) the Security Purpose Agreement; (c) the Borrower Account Pledge Agreements; (d) the Assignment of Leases; (e) the Master Lessee Assignment of Permitted Subleases; (f) the Assignment of Acquisition Documentation; (g) the Assignment of Insurance; and (h) the Master Lessee Assignment of Services Agreements. For further information see The Loan and the Related Security Description of the Mezzanine Facility Agreement and the Loan Intercreditor Arrangements The Intercreditor Arrangements. On 5 September 2006, the Borrower Security Trustee, the Facility Agent on behalf of the Finance Parties and on behalf of the Mezzanine Finance Parties, the Originator and the Mezzanine Lender entered into an intercreditor agreement (the Loan Intercreditor Agreement) with respect to the relative rights of the Finance Parties, the finance parties under the Mezzanine Finance Documents (the Mezzanine Finance Parties) to (a) direct the Borrower Security Trustee as to enforcement of the security created by the Common Security Agreements (the Common Security), (b) receive payments under the Senior Finance Documents and the Mezzanine Finance Documents, and (c) receive the proceeds of enforcement by the Borrower Security Trustee of the Common Security. The Loan Intercreditor Agreement was amended on or about 21 September For further information see: The Loan and the Related Security Description of the Mezzanine Facility Agreement and the Loan Intercreditor Arrangements The Intercreditor Arrangements below. 8. THE MASTER LEASE AND PERMITTED SUBLEASES Lease Regime: The Borrower leases the Properties to W2005/Seven BV (the Master Lessee) pursuant to an intermediate lease agreement (Zwischenmietvertrag) dated 30 June 2006 as amended on 5 September 2006 between the Borrower, as lessor and the Master Lessee, as Lessee (the Master Lease). Other properties (the Portfolio A Properties), most of which are used in the business of the KarstadtQuelle group and owned by Highstreet A, are also leased to the Master Lessee pursuant to a separate intermediate lease agreement (Zwischenmietvertrag) on similar terms. Both the Properties and the Portfolio A Properties are then leased by the Master Lessee to Karstadt Warenhaus GmbH and Quelle GmbH (each a Major Sub-Tenant in respect of the Properties and/or the Portfolio A Properties, as applicable, leased by it and together the 19

20 Major Subtenants) pursuant to two global lease agreements (Gesamtmietverträge) (the Permitted Subleases) dated 27 March 2006 as amended on 30 June 2006 and on 30 August/12 September/ 13 September The Master Lease: Leased Properties: Duration of Master Lease: The parties to the Master Lease are the Borrower and the Master Lessee. The Master Lease is also expressed to be entered into with the concurrence (unter Mitwirkung) of the Major Subtenants. All of the Properties other than the Non-Leased Properties (each a Leased Property and collectively the Leased Properties) are leased by the Borrower to the Master Lessee pursuant to the Master Lease. Relevant information in respect of such Properties is set out in Appendix 3 below. For further information see The Loan and the Related Security Description of the Master Lease and the Permitted Subleases The Master Lease Leased Property and Purpose below. The Master Lease is expressed to commence on 1 July 2006 and the initial term is expressed to run for a period of 15 years from commencement of the Master Lease. The Master Lessee has three extension options (or two extension options, in the case of the Property at Bahnhofplatz 7, Munich)* of five years each. The Master Lease also provides that at the end of the term of the Lease (including any renewal periods) the Master Lease will continue indefinitely until terminated by either party (on 11 months notice by the Master Lessee or 13 months notice by the Borrower). The parties also have rights to terminate the Master Lease before the end of the term for significant cause (aus wichtigem Grund). For further information in relation to the term and termination rights, see The Loan and the Related Security Description of the Master Lease and the Permitted Subleases The Master Lease Duration of Lease below. The Permitted Sublease: Leased Properties: Pursuant to the Permitted Sublease between the Master Lessee and Karstadt Warenhaus GmbH (Karstadt), the Master Lessee subleases certain of the Properties (other than the Non-Leased Properties), along with other properties leased to it under the master lease agreement between Highstreet A, as lessor, and the Master Lessee, as lessee, (the Portfolio A Master Lease) to Karstadt (the Karstadt Sublease). Pursuant to the Permitted Sublease between the Master Lessee and Quelle GmbH (Quelle), the Master Lessee subleases the remaining Properties (other than the Non-Leased Properties), along with other properties leased to it under the Portfolio A Master Lease, to Quelle (the Quelle Sublease). The Properties identified in the table in Appendix 3 as being leased to Karstadt are leased pursuant to the Karstadt Sublease and the Properties identified as being leased to Quelle are leased pursuant to the Quelle Sublease. Properties leased to the Master Lessee under the Portfolio A Master Lease are also leased pursuant to the Permitted Subleases but such properties do not form part of the Related Security and are not identified in Appendix 3. For further * Sale of the Property not yet completed. Property is currently cash collateralised. 20

21 information see The Loan and the Related Security Description of the Master Lease and the Permitted Subleases The Permitted Subleases Leased Property and Purpose below. Duration of Sublease: Each Permitted Sublease is expressed to commence on 1 July 2006 and the initial term is expressed to run for a period of 15 years from commencement of the Lease. Karstadt has three extension options (or two extension options in the case of the Property at Bahnhofplatz 7, Munich)* of five years each in respect of the Karstadt Sublease. Quelle has three extension options of five years each in respect of the Quelle Sublease. Each Permitted Sublease also provides that at the end of the term of the Lease (including any renewal periods) such Permitted Sublease will continue indefinitely until terminated by either party (on 12 months notice). The parties also have rights to terminate the Permitted Subleases before the end of the term for significant cause (aus wichtigem Grund). For further information in relation to the term and termination rights, see The Loan and the Related Security Description of the Master Lease and the Permitted Subleases The Permitted Subleases Duration of Lease below. 9. THE NOTES Status and Form: The A780,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class A Notes), the A170,000,000 Class B Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class B Notes), the A143,100,000 Class C Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class C Notes) and the A98,921,267 Class D Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class D Notes and, together with the Class A Notes, the Class B Notes and the Class C Notes, the Notes) will be constituted by the Note Trust Deed. The Notes of each class will rank pari passu and rateably without any preference or priority among themselves. The Notes will all share the same security, but, in the event of the security being enforced, the Class A Notes will rank pari passu and without preference or priority among themselves in priority to the Class B Notes, the Class C Notes and the Class D Notes. The Class B Notes will rank pari passu and without preference or priority among themselves in priority to the Class C Notes and the Class D Notes. The Class C Notes will rank pari passu and without preference or priority among themselves in priority to the Class D Notes. The Class D Notes will rank pari passu and without preference or priority among themselves. The Notes of each class will initially be represented on issue by a Temporary Global Note in bearer form for such Class of Notes, without interest coupons attached. The Temporary Global Notes will be deposited on or about the Issue Date with a common safekeeper for Euroclear and Clearstream, Luxembourg. The Note Trust Deed, the Issuer Deed of Charge and Assignment and the German Security Assignment Agreement contain provisions requiring the Note Trustee and the Issuer Security Trustee to have regard to the interests of the holders of the Class A Notes (the Class A Noteholders), the holders of the Class B Notes 21

22 Security for the Notes: (the Class B Noteholders), the holders of the Class C Notes (the Class C Noteholders) and the holders of the Class D Notes (the Class D Noteholders and, together with the Class A Noteholders, the Class B Noteholders and the Class C Noteholders, the Noteholders) equally but where there is, in the Note Trustee s or, as the case may be, the Issuer Security Trustee s opinion, a conflict between such interests, the Note Trustee or as the case may be, the Issuer Security Trustee shall have regard only to the interests of the holders of the Most Senior Class of Notes then outstanding, subject to Condition 3.1 (Status and relationship among the Notes). The Notes and interest thereon will not be obligations or responsibilities of any person other than the Issuer. In particular, the Notes will not be obligations or responsibilities of, or be guaranteed by, Goldman Sachs International or any associated body of Goldman Sachs International, in its capacity as Lead Manager and Arranger, or of or by, the Co-Manager, the Originator, the Retained Interest Holder, the Facility Agent, the Note Trustee, the Issuer Security Trustee, the Borrower Security Trustee, the Corporate Services Provider, the Servicer, the Special Servicer, the Cash Manager, the Liquidity Facility Provider, the Basis Swap Counterparty, the Paying Agents, the Agent Bank, the Issuer Account Bank or any of their respective affiliates or shareholders or the shareholders of the Issuer and none of such persons accepts any liability whatsoever in respect of any failure by the Issuer to make payment of any amount due on the Notes. The limited recourse secured obligations of the Issuer to the Issuer Secured Creditors will be secured by and pursuant to the Issuer Deed of Charge and Assignment governed by English law and the German Security Assignment Agreement governed by German Law. The Issuer with full title guarantee will grant the following security (the Issuer Security) under the Issuer Deed of Charge and Assignment in favour of the Issuer Security Trustee for itself and on trust for the other Issuer Secured Creditors: (a) a first fixed charge over the Issuer s rights in, to and under the trusts created by the Loan Security Trust Deed; (b) an assignment by way of first-ranking security of the Issuer s rights under the Loan Intercreditor Agreement, the Retained Interest Holder Intercreditor Deed, the Servicing Agreement, the Note Trust Deed, the Cash Management and Issuer Account Bank Agreement, the Agency Agreement, the Liquidity Facility Agreement, the Basis Swap Agreement, the Master Definitions and Construction Schedule and all other agreements, contracts, deeds or instruments which it enters into after the Issue Date and which are governed by English law; (c) a first fixed charge over the Issuer s interests in the Transaction Account, the Standby Account (subject as set out below) and any other bank account in England in which the Issuer may place and hold its cash resources, and in the funds from time to time standing to the credit of such accounts and in the debts represented thereby save for the Issuer Share Capital Account; 22

23 Principal Amount Outstanding: Interest: (d) a first fixed charge in and to such Eligible Investments made by or on behalf of the Issuer using monies standing to the credit of the Transaction Account or the Standby Account and all monies, income and proceeds payable thereunder or accrued thereon and the benefit of all covenants relating thereto and all rights and remedies enforcing the same; and (e) a first-ranking floating charge governed by English law over the whole of the undertaking and assets of the Issuer, present and future save for the Issuer Share Capital Account (to the extent not effectively assigned or charged as set out in paragraphs (a) through (d) above and other than property or assets subject to the security constituted by the German Security Assignment Agreement). Pursuant to the German Security Assignment Agreement the Issuer will grant in favour of the Issuer Security Trustee as trustee (Treuhänder) a security assignment of all of the Issuer s rights under the Loan, the Joint Security Trust Deed, the Related Security governed by German law and the Senior Facility Agreement, including all amounts which may become payable to the Issuer thereunder, and the Loan Sale Agreement (the Issuer German Security). The Principal Amount Outstanding of a Note on any date will be its Initial Principal Amount less the aggregate amount of principal repayments (Principal Payments) paid in respect of that Note since the Issue Date. Each Note will bear interest on its Principal Amount Outstanding from, and including, the Issue Date. Interest will be payable on the Notes quarterly in arrear on 26 January, 26 April, 26 July and 26 October in each year (or, if such day is not a Business Day, the next following Business Day) in respect of the Interest Period ending immediately prior thereto. The first Payment Date in respect of the Notes will be the Payment Date falling in January The first Interest Period will commence on (and include) the Issue Date and end on (but exclude) the Payment Date falling in January Each successive Interest Period will commence on (and include) the next (or first) Payment Date and end on (but exclude) the following Payment Date. The interest rate applicable to the Notes from time to time (the Rate of Interest) will be EURIBOR as determined in accordance with Condition 5.3 (Rate of Interest) for three month euro deposits plus the Relevant Margin (other than in respect of the first Interest Period, the rate for which will be determined by a linear interpolation of the rate for three month and four month euro deposits). The Relevant Margin in respect of each Class of Notes will be: Class Relevant Margin A 0.21 per cent. per annum B 0.32 per cent. per annum C 0.51 per cent. per annum D 0.95 per cent. per annum 23

24 Withholding or Deduction for Taxes: Principal Final Redemption: Mandatory Redemption in Part: Optional Redemption in Full: Whenever it is necessary to compute an amount of interest in respect of any of the Notes for any period, such interest will be calculated on the basis of applying the relevant Rate of Interest to the Principal Amount Outstanding of the relevant Class of Notes then outstanding and multiplying such sum by the actual number of days elapsed in the relevant Interest Period divided on the basis of a 360-day year. A Note Event of Default shall occur if there are insufficient funds available to the Issuer on any Payment Date to pay interest then accrued due and payable on the Most Senior Class of Notes only, but shall not occur if there are insufficient funds available to pay interest then accrued due and payable on any one or more Classes of more junior-ranking Notes then outstanding. Any such shortfall in the amount then due will only be paid in accordance with the order of seniority of the affected classes of Notes on that and each subsequent Payment Date when permitted by subsequent cash flow which is available after the Issuer s other higher priority liabilities have been discharged. All payments of interest on and repayments of principal in respect of the Notes will be made subject to any applicable withholding or deduction for or on account of any tax, and neither the Issuer nor any other person will be obliged to pay any additional amounts to Noteholders in respect of any amounts required to be withheld or deducted. The Irish withholding tax position in relation to the Notes is described in Irish Taxation. See also Risk Factors Factors Relating to the Notes Withholding Tax under the Notes or the Loan. Unless previously redeemed in full, the Notes will be redeemed at their Principal Amount Outstanding together with accrued interest on the Final Maturity Date. Unless a Note Acceleration Notice has been served, the Notes of each class will be subject to mandatory redemption in part on each Payment Date in order of seniority by applying an amount equal to any Available Principal Collections to redeem the Notes pursuant to Condition 6.2 (Mandatory Redemption from Available Principal Collections). The Notes may be redeemed in full, but not in part: (a) if the aggregate Principal Amount Outstanding of the Notes is less than 10 per cent. of the aggregate Principal Amount Outstanding of the Notes as at the Issue Date; or (b) if the Issuer satisfies the Note Trustee that by virtue of a change in tax law from that in effect on the Issue Date, the Issuer or any Paying Agent on its behalf would be required to make any withholding or deduction from payments in respect of the Notes, provided that: (i) in each case the Issuer has certified in writing to the Note Trustee that it will have the necessary funds available to it on the relevant Payment Date to discharge all of its liabilities in respect of the Notes and any amounts required under the Cash Management and Issuer Account Bank Agreement, the Note Trust 24

25 Deed and the Issuer Deed of Charge and Assignment to be paid in priority to, or pari passu with, the Notes on such Payment Date; and Ratings: (ii) no Note Acceleration Notice has been served. See Terms and Conditions of the Notes, specifically Conditions 6.3 (Optional Redemption for Tax or Other Reasons) and6.4 (Optional Redemption in Full). It is expected that the Notes will, on issue, be assigned the following ratings: Class Fitch Moody s S&P Class A AAA Aaa AAA Class B AA NR AA Class C A NR A Class D BBB NR BBB A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by one or more of the assigning rating organisations. The ratings of the Notes are dependent upon, among other things, the short-term, unsecured, unsubordinated debt ratings of the Liquidity Facility Provider and the Issuer Account Bank, and the long-term unsecured, unsubordinated debt ratings of the Basis Swap Counterparty. A qualification, downgrade or withdrawal of any such ratings by a Rating Agency may have an adverse effect on the ratings of the Notes. Sales Restrictions: Listing: Settlement: Governing Law: The Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Securities Act or in certain transactions exempt from the registration requirements of the Securities Act and subject to U.S. tax law restrictions. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List of the Irish Stock Exchange and to trading on its regulated market. Clearstream, Luxembourg and Euroclear. The Conditions, the Notes, the Issuer Deed of Charge and Assignment and the Note Trust Deed will be governed by English law. The German Security Assignment Agreement and the Loan Sale Agreement will be governed by German law. 10. HEDGING ARRANGEMENTS AND THE LIQUIDITY FACILITY Basis Swap Transaction: Pursuant to the terms of the Basis Swap Agreement, the Issuer will enter into a basis swap transaction (the Basis Swap Transaction) in relation to the Loan. If the long-term, unsecured, unsubordinated debt obligations of the Basis Swap Counterparty cease to be rated at least A1 by Moody s or A- by S&P (the Minimum Basis Swap Counterparty Ratings) or any such rating is withdrawn by S&P or Moody s, the Basis Swap Agreement will require the Basis Swap Counterparty, within 30 days of the occurrence of such downgrade at the cost of the Basis Swap Counterparty, to: 25

26 Liquidity Facility: (a) procure a replacement basis swap provider with the applicable Minimum Basis Swap Counterparty Ratings or such other rating as is commensurate with the ratings assigned to the Notes by the Rating Agencies from time to time; or (b) procure another person with the applicable Minimum Basis Swap Counterparty Ratings to become co-obligor in respect of its obligations under the Basis Swap Agreement; or (c) take such other action as the Basis Swap Counterparty may agree with the Rating Agencies as will result in the ratings of the Notes being maintained at, or restored to, the level they were at immediately prior to such downgrade or withdrawal; or (d) execute, within 30 days of the rating downgrade or rating withdrawal, a swap credit support document and deliver to the Issuer Security Trustee or as the Issuer Security Trustee may direct collateral in respect of its obligations under the Basis Swap Transaction in an amount or value determined in accordance with the swap collateral requirements of the Rating Agencies. In the event that a rating of the Basis Swap Counterparty falls below the Minimum Basis Swap Counterparty Ratings to a further specified level, the option of posting collateral will be subject to certain conditions or may no longer be available to the Basis Swap Counterparty. For a more detailed description of the Basis Swap Transaction, see The Transaction Documents The Basis Swap Agreement. Pursuant to a liquidity facility agreement (the Liquidity Facility Agreement) to be dated on or about the Issue Date between the Liquidity Facility Provider, the Issuer, the Cash Manager and the Issuer Security Trustee, the Liquidity Facility Provider will provide to the Issuer a liquidity facility in respect of the Notes (the Liquidity Facility) with a maximum aggregate principal amount available for drawdown of A82,600,000 (the Liquidity Commitment). The Liquidity Commitment will be reduced as the outstanding principal balance of the Loan decreases in accordance with an agreed mechanism, subject to a minimum balance of 10 per cent. of the original Liquidity Commitment as at the Issue Date and may otherwise be reduced with the prior written consent of the Issuer and the Issuer Security Trustee, provided that confirmation in writing is obtained from the Rating Agencies that such reduction in the Liquidity Commitment will not result in a downgrading of the Notes. The Issuer will make and apply the drawings under the Liquidity Facility Agreement to meet any of the following shortfalls in the funds available to it as determined from time to time by the Servicer or the Special Servicer (in the event that the Loan becomes a Specially Serviced Loan): (a) an Interest Shortfall; or (b) a Revenue Priority Amount Shortfall, each as more fully described in the section The Transaction Documents The Liquidity Facility Agreement. An Interest Drawing and a Revenue Priority Amount Drawing are each referred to as a Liquidity Drawing. The Liquidity Commitment may also be reduced in connection with an Appraisal Reduction. See further Servicing of the Loan Appraisal Reductions. 26

27 All payments due to the Liquidity Facility Provider in respect of amounts drawn by the Issuer (other than Liquidity Subordinated Amounts) pursuant to the terms of the Liquidity Facility Agreement will be repayable to the Liquidity Facility Provider (together with, among other things, any interest thereon) in point of priority ahead of payments of interest on the Notes. The Issuer will, on each Business Day that Revenue Receipts consisting of late payments under the Loan received after the related Liquidity Drawing are or remain credited to the Transaction Account, pay such Revenue Receipts in or towards pre-paying such Liquidity Drawing. If a Liquidity Drawing is not repaid on the relevant Payment Date as described above, the amount outstanding under the Liquidity Facility will be deemed to be repaid (but only for the purposes of the Liquidity Facility) and redrawn on such Payment Date in an amount equal to all amounts outstanding. This procedure will be repeated on each subsequent Payment Date, up to the amount of the Liquidity Commitment, until all amounts outstanding are paid and/or repaid. The requisite rating for the Liquidity Facility Provider s short term unsecured, unsubordinated, unguaranteed debt obligations is a minimum rating of F1 by Fitch, P-1 by Moody s and A-1+ by S&P. For a more detailed description of the Liquidity Facility, see The Transaction Documents The Liquidity Facility Agreement. 11. APPLICATION OF FUNDS Funds Paid into the Transaction Account: Subject to the following sentence, on each Loan Payment Date, the Facility Agent or the Borrower Security Trustee, as applicable, under the Senior Facility Agreement, at the direction of the Servicer or, as applicable, the Special Servicer will, to the extent funds are available, transfer from each of the relevant Borrower Accounts (as defined in The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts The Structure of the Accounts The Accounts of the Borrower ) to an account held with the Issuer Account Bank in the name of the Issuer (the Transaction Account), all amounts of interest and principal due to the Issuer (for the avoidance of doubt excluding Retained Interest which will be due to the Originator) and all prepayments under the Senior Facility Agreement, and will distribute all other amounts standing to the credit of the relevant Borrower Account in the priorities and in the manner set forth under The Structure of the Accounts The Accounts of the Borrower below. The Facility Agent and the Borrower Security Trustee shall transfer the Retained Interest (if any) to the account designated by the Originator and/or Retained Interest Holder, as applicable. The repayment of principal and payment of interest by the Borrower under the Loan along with payments by the Basis Swap Counterparty and Liquidity Drawings will provide the principal source of funds for the Issuer to make repayments of principal and payments of interest in respect of the Notes. Cash Manager Note Calculations on Determination Dates: On each Determination Date, the Cash Manager will calculate the amount of any Liquidity Drawings which will be required to be made on the following Payment Date, and the Cash Manager will 27

28 Revenue Receipts: Available Interest Collections: also be required to calculate and/or determine, based on and subject to receipt of information to be provided to it by the Servicer and/or the Special Servicer, the following: (a) the amount of Available Interest Collections and Available Principal Collections received during the Interest Period to which such Determination Date relates; and (b) all amounts due according to the Issuer Principal Pre- Enforcement Priority of Payments and the Issuer Revenue Pre-Enforcement Priority of Payments set forth below. The Issuer s interest and income receipts (the Revenue Receipts) will comprise, on any day, payments of interest (other than Retained Interest), fees (other than Prepayment Fees), expenses, commissions and other sums, in each case made by the Borrower in respect of the Loan or the Related Security (other than any payments in respect of principal), including recoveries of such amounts on enforcement of the Loan and Related Security or upon a repurchase of the Loan pursuant to the terms of the Loan Sale Agreement and standing to the credit of the Transaction Account on that day. Available Interest Collections means, as at a Payment Date, an amount equal to the aggregate of: (a) the Revenue Receipts standing to the credit of the Transaction Account at the close of business on the day immediately prior to the Determination Date applicable to such Payment Date; (b) the net amounts paid or due to be paid to the Issuer under the Basis Swap Agreement in respect of the Interest Period to which that Determination Date relates other than (i) collateral transferred to the Issuer thereunder (excluding amounts applied in satisfaction of termination payments due to the Issuer following the designation of an early termination date under the Basis Swap Agreement); (ii) any termination payment paid by the Basis Swap Counterparty to the Issuer to the extent such termination payment is paid to a suitably rated replacement swap provider in consideration for such swap provider entering into a suitable replacement swap agreement (Available Interest Collections shall also, for the avoidance of doubt, include any swap breakage costs paid by the Basis Swap Counterparty to the Issuer following the occurrence of a prepayment under the Loan), (iii) any part of any Swap Tax Credit Amount; and (iv) any Replacement Swap Premium; (c) drawings made by the Issuer (or the Cash Manager on its behalf) pursuant to the terms of the Liquidity Facility Agreement; (d) any interest accrued upon and paid to the Issuer on the Transaction Account and the Standby Account; and (e) the income from any Eligible Investments and the principal proceeds of any realisation of any Eligible Investments to the extent that any corresponding principal amount invested is derived from other Available Interest Collections. Gross-up Amount means any additional amounts that the Basis Swap Counterparty is required to pay to the Issuer to compensate 28

29 Priority of Payments: Issuer Revenue Pre-Enforcement Priority of Payment: for any withheld or deducted amounts on account of tax to ensure that the Issuer receives the same amount had such withholding or deduction not been made. Swap Tax Credit Amount means an amount equal to the cash benefit equivalent of any tax credit, allowance, set-off or repayment from any tax authority received by the Issuer in connection with payment by the Basis Swap Counterparty of any Gross-Up Amount to the extent that payment of such amount to the Basis Swap Counterparty would leave the Basis Swap Counterparty in substantially the same position as it would have been had it not paid the Gross-Up Amount. Such amount will be paid directly to the Basis Swap Counterparty by the Issuer. Replacement Swap Premium means any premium or upfront payment received by the Issuer from a replacement swap counterparty under a replacement basis swap transaction to the extent of the termination payment due to the Basis Swap Counterparty under the Basis Swap Agreement. Prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable, the Issuer and/or the Cash Manager shall pay from Revenue Receipts standing to the credit of the Transaction Account and in priority to all other payments required to be made by the Issuer on any day such payments are required, amounts due to third parties (other than the Issuer Secured Creditors), including the Issuer s liability, if any, to tax and under obligations incurred in the course of the Issuer s business. Prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable, on each Payment Date, the Issuer and/or the Cash Manager will apply Available Interest Collections as determined on the immediately preceding Determination Date in the following manner and order of priority (the Issuer Revenue Pre-Enforcement Priority of Payments and together with the Issuer Principal Pre-Enforcement Priority of Payments the Pre-Enforcement Priority of Payments) (in each case only if and to the extent that payments or provisions of a higher priority have been made in full): (a) (b) (c) first, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof, of the fees or other remuneration of (and amounts payable in respect of indemnity protection) and any costs, charges, liabilities and expenses incurred by the Note Trustee and the Issuer Security Trustee, respectively, and, in each case, the appointees thereof; second, in or towards payment to the Issuer of A625 per annum (the Issuer s Profit) to be retained as profit and distributed by the Issuer; third, pro rata and pari passu in or towards satisfaction of (i) the amounts, including audit fees, fees due to the stock exchange where the Notes are then listed, fees due to Rating Agencies and company secretarial expenses, which are payable by the Issuer to third parties and incurred without breach by the Issuer of the Note Trust Deed, the Issuer Deed of Charge and Assignment or the German Security 29

30 Assignment Agreement and not provided for payment elsewhere and to provide for any such amounts expected to become due and payable by the Issuer after that Payment Date and to provide for the Issuer s liability or possible liability for tax; (ii) all amounts due to the Corporate Services Provider; (iii) all amounts due to the Servicer or the Special Servicer under the Servicing Agreement (other than any Liquidation Fee or any Workout Fee unless deducted from a payment of interest); (iv) all amounts due to the Issuer Account Bank under the Cash Management and Issuer Account Bank Agreement; (v) all amounts due to the Cash Manager under the Cash Management and Issuer Account Bank Agreement; and (vi) all amounts due to the Paying Agents and the Agent Bank under the Agency Agreement; (d) fourth, pro rata and pari passu in or towards all amounts of principal, interest and commitment fees due or accrued but unpaid to the Liquidity Facility Provider under the Liquidity Facility Agreement (other than Liquidity Subordinated Amounts including amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to be commitment fee as a result of the Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider to the extent that all such amounts are not Liquidity Subordinated Amounts); (e) fifth, pro rata and pari passu in or towards satisfaction of all amounts due or overdue to the Basis Swap Counterparty under the Basis Swap Agreement other than (i) any Swap Tax Credit Amount and/or any Replacement Swap Premium (which will be paid directly to the Basis Swap Counterparty) or any collateral transferred pursuant to the Basis Swap Agreement and/or (ii) Basis Swap Subordinated Amounts; (f) sixth, in or towards satisfaction, on a pro rata and pari passu basis, of interest due or overdue on the Class A Notes; (g) seventh, in or towards satisfaction, on a pro rata and pari passu basis, of interest due or overdue on the Class B Notes; (h) eighth, in or towards satisfaction, on a pro rata and pari passu basis, of interest due or overdue on the Class C Notes; (i) ninth, in or towards satisfaction, on a pro rata and pari passu basis, of interest due or overdue on the Class D Notes; (j) tenth, in or towards satisfaction of the Liquidity Subordinated Amounts; (k) eleventh, in or towards satisfaction of any Basis Swap Subordinated Amounts; (l) twelfth, in or towards payment of any amounts payable by the Issuer to the Originator under the Loan Sale Agreement (to the extent not already provided for); and (m) thirteenth, the surplus, if any, to the Issuer. Basis Swap Subordinated Amount means any termination amount due to the Basis Swap Counterparty as a result of the occurrence of a Basis Swap Trigger (as defined below in Description of the Transaction Documents The Basis Swap Agreement ). 30

31 Liquidity Subordinated Amounts means amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to the commitment fee as a result of the implementation of the Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider (excluding any amounts paid to the Liquidity Facility Provider under (d) of the Issuer Revenue Pre-Enforcement Priority of Payments) and any additional percentage in aggregate in excess of 0.2 per cent. per annum on the maximum aggregate amount available to be drawn on the Liquidity Facility Agreement. Available Principal Collections: The Pro Rata Redemption Amount and the Sequential Redemption Amount constitute Available Principal Collections for the purposes of the Payment Date immediately following a Determination Date. Scheduled Amortisation Amount means, in respect of any Determination Date, the aggregate amount of principal received by or on behalf of the Issuer during the Collection Period then ended by way of a required amortisation instalment under the Loan (for the avoidance of doubt, this amount does not include any final required repayment instalment of the Loan); Available Principal Collections means in respect of any Determination Date, the aggregate of (i) the Pro Rata Redemption Amount and (ii) the Sequential Redemption Amount; Release Premium Amount means, in respect of any Determination Date, the aggregate amount of principal prepayments received by or on behalf of the Issuer during the Collection Period then ended of all or part of the Loan that represent Release Amount Differential paid by the Borrower in respect of a Disposal of all or part of a Property; The following is a Sequential Payment Trigger: (a) A Loan Event of Default (based on the terms of the Senior Facility Agreement) as at the Issue Date and without regard to any subsequent amendments to the Senior Facility Agreement or waivers granted in respect thereof has occurred, provided that a Loan Event of Default shall not be deemed to have occurred for the purposes of this definition if: (i) the Loan Event of Default is with respect to payment and such default has been remedied or cured within 5 Business Days of such default; and/or (ii) the Loan Event of Default is other than a Loan Event of default described in (i) above, and the Loan Event of Default is capable of being remedied or cured within 30 days of such default being notified in accordance with the terms of the Senior Facility Agreement; (b) there has been a failure to pay interest when due on any Note (other than the Most Senior Class of Notes then outstanding); or (c) the occurrence of any Payment Date falling in or after July 2011; 31

32 Pro Rata Redemption of Notes: Issuer Sequential Principal Priority of Payments: Pro Rata Redemption Amount means an amount, as calculated on each Determination Date prior to the occurrence of a Sequential Payment Trigger, equal to: (a) the sum of all collections received by the Issuer in respect of principal repayments or prepayments on the Loan during the Collection Period immediately preceeding such Determination Date, other than the Sequential Redemption Amount; less (b) any Liquidation Fee due and payable in respect of the Loan and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period, each in accordance with and pursuant to the terms of the Servicing Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount); Sequential Redemption Amount means an amount, as calculated on each Determination Date equal to: (a) the sum of all Scheduled Amortisation Amounts and all Release Premium Amount; less (b) any Liquidation Fee due and payable in respect of the Loan (to the extent not paid from the Pro Rata Redemption Amount) and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period (to the extent not payable from the Pro Rata Redemption Amount), each in accordance with and pursuant to the terms of the Servicing Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount). On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and prior to the occurrence of a Sequential Payment Trigger, the Issuer, or the Cash Manager on its behalf, will apply the Pro Rata Redemption Amount in redeeming each Class of Notes pro rata and pari passu according to their respective Principal Amounts Outstanding (calculated for the avoidance of doubt, before the application on such Payment Date of the Sequential Redemption Amount) until each Class A Note, Class B Note, Class C Note and Class D Note has been redeemed in full (the Pro Rata Redemption of Notes). On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and prior to the occurrence of a Sequential Payment Trigger and following application of the Pro Rata Redemption Amount, the Issuer, or the Cash Manager on its behalf, will apply the Sequential Redemption Amount (such application being, together with the Pro Rata Redemption of Notes, the Issuer Principal Pre-Enforcement Priority of Payments as follows) (the Issuer Sequential Principal Priority of Payments): 32

33 Sequential Payment Trigger: Post-Enforcement Priority of Payments: (a) (b) (c) (d) first, to redeem the Class A Notes, pro rata and pari passu without preference amongst themselves, until the Class A Notes have been redeemed in full; second, to redeem the Class B Notes, pro rata and pari passu without preference amongst themselves, until the Class B Notes have been redeemed in full; third, to redeem the Class C Notes, pro rata and pari passu without preference amongst themselves, until the Class C Notes have been redeemed in full; and fourth, to redeem the Class D Notes, pro rata and pari passu without preference amongst themselves, until the Class D Notes have been redeemed in full. On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and following the occurrence of a Sequential Payment Trigger, the Issuer, or the Cash Manager on its behalf, will apply all Available Principal Collections in accordance with the Issuer Sequential Principal Priority of Payments. For further information see Condition 6.2 (Mandatory Redemption from Available Principal Collections). The Issuer Revenue Pre-Enforcement Priority of Payments and the Issuer Principal Pre-Enforcement Priority of Payments are together the Pre-Enforcement Priority of Payments. Following the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable, the Issuer Security Trustee will apply all monies and receipts received by the Issuer and/or the Issuer Security Trustee or any receiver appointed by it in respect of the Issuer Security (other than any Replacement Swap Premium and/or Swap Tax Credit Amount (each of which will be paid directly to the Basis Swap Counterparty) or any Basis Swap Collateral or amounts standing to the credit of the Stand-by Account (if any) or the Issuer Share Capital Account ) or the Issuer German Security (whether of principal or interest or otherwise) in the following manner and order of priority (the Post-Enforcement Priority of Payments and, together with the Pre-Enforcement Priority of Payments, the Priority of Payments) (in each case only if and to the extent that payments of a higher priority have been made in full): (a) (b) first, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof, of the costs, expenses, fees or other remuneration and indemnity payments (if any) payable to the Note Trustee or any of its appointees and the Issuer Security Trustee or any of its appointees (including any receiver appointed by the Issuer Security Trustee) and any costs, charges, liabilities and expenses incurred by the Note Trustee or the Issuer Security Trustee or any of its appointees (including any receiver); second, pro rata and pari passu in and towards the satisfaction of (i) all amounts due to the Issuer Account Bank under the Cash Management and Issuer Account Bank Agreement, (ii) all amounts due to the Cash Manager under the Cash Management and Issuer Account Bank Agreement, (iii) all amounts due to the Principal Paying Agent, the Irish Paying 33

34 (c) (d) (e) (f) (g) Agent and the Agent Bank under the Agency Agreement, (iv) all amounts due to the Corporate Services Provider and (v) all amounts due to the Servicer or the Special Servicer under the Servicing Agreement; third, pro rata and pari passu in or towards satisfaction of all amounts of principal, interest and commitment fees due or accrued due but unpaid to the Liquidity Facility Provider under the Liquidity Facility Agreement (other than Liquidity Subordinated Amounts) including amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to the commitment fee as a result of the Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider to the extent that all such amounts are not Liquidity Subordinated Amounts; fourth, pro rata and pari passu in or towards satisfaction of all amounts due or overdue to the Basis Swap Counterparty under the Basis Swap Agreement (other than the Basis Swap Subordinated Amounts); fifth, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof of: (i) all interest due or overdue on the Class A Notes; and (ii) after payments of all such sums in paragraph (e)(i) above, all amounts of principal outstanding on the Class A Notes until all of the Class A Notes have been redeemed in full; sixth, in or towards satisfaction of: (i) all interest due or overdue on the Class B Notes; and (ii) after payments of all such sums in paragraph (f)(i) above, all amounts of principal outstanding on the Class B Notes until all of the Class B notes have been redeemed in full; seventh, in or towards satisfaction of: (i) all interest due or overdue on the Class C Notes; and (ii) after payments of all such sums in paragraph (g)(i) above, all amounts of principal outstanding on the Class C Notes until all of the Class C Notes have been redeemed in full; (h) eighth, in or towards satisfaction of: (i) all interest due or overdue on the Class D Notes; and (ii) after payments of all such sums in paragraph (h)(i) above, all amounts of principal outstanding on the Class D Notes until all of the Class D notes have been redeemed in full; (i) ninth, in or towards satisfaction of any Liquidity Subordinated Amounts; (j) tenth, on a pro rata and pari passu basis, in or towards satisfaction of all Basis Swap Subordinated Amounts; 34

35 (k) eleventh, in or towards payment of any amounts payable by the Issuer to the Originator under the Loan Sale Agreement (to the extent not already provided for); and (l) twelfth, the surplus, if any, to the Issuer or other persons entitled thereto. Basis Swap Collateral means any collateral provided by the Basis Swap Counterparty in accordance with the Basis Swap Agreement. For the avoidance of doubt, the Noteholders and the other Issuer Secured Creditors will have recourse only to the assets comprised in the Issuer Security and Issuer German Security which consist primarily of the Issuer s rights in and to the Loan and the Related Security. Neither the Noteholders nor any of the other Issuer Secured Creditors will at any time have any recourse to any other assets of the Issuer. In addition, the amounts available to the Noteholders on the enforcement of the Issuer Security or Issuer German Security will not include the amounts standing to the credit of the Standby Account, and the Issuer Security Trustee will (following enforcement of the Issuer Security or Issuer German Security) pay the amount (if any) standing to the credit of the Standby Account to the Liquidity Facility Provider. 12. DIAGRAM The following is a diagram of the transaction. Lloyds TSB Bank plc Liquidity Facility Provider Liquidity Facility Grant of Security Deutsche Trustee Company Limited Note/Security Trustee Goldman Sachs Credit Partners LP. Originator Tenants Loan Origination Rent/Net Operating Income Sale of Loan Consideration Interest & Principal on Loan HIGHSTREET High Street B PORTFOLIO B Portfolio GBR GBR Borrower Fleet Street Finance Two plc Issuer Deutsche International Corporate Services (Ireland) Limited Corporate Services Provider Principal & Interest on Notes Issue of Notes Note Proceeds Noteholders Deutsche Bank (London Branch) Account Bank/Cash Manager/Agent Bank Capmark Servicer ABN AMRO Borrower Security Trustee Capmark Special Servicer 35

36 RISK FACTORS The following is a summary of certain issues of which prospective Noteholders should be aware, but it is not intended to be exhaustive, and prospective Noteholders should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior to making any investment decision. The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with any Notes may occur for other reasons which may not be considered significant risks by the Issuer based on information currently available to it on which it may not currently be able to anticipate. General Factors Relating to the Loan Default by Borrower The ability of the Issuer to meet its obligations under the Notes will be dependent on the receipt by it of payments from the Borrower under the Loan and the other Senior Finance Documents and from the Basis Swap Counterparty under the Basis Swap Agreement and the availability of drawings under the Liquidity Facility Agreement. The Issuer s recourse under the Loan and the other Senior Finance Documents is generally limited to the Borrower and/or its assets. The only material assets of the Borrower are the Properties and the Master Lease, and the business activities of the Borrower are generally limited to owning, managing and otherwise dealing with the Properties. Consequently, the ability of the Borrower to make payments on the Loan and the other Senior Finance Documents prior to the Loan Final Maturity Date, and, therefore, the ability of the Issuer to make payments on the Notes prior to the Final Maturity Date, are dependent primarily on the sufficiency of the net operating income of the Properties, which in turn will depend on the payments made by the Master Lessee under the Master Lease and the Major Subtenants under the Permitted Subleases. The Loan is secured over commercial property. Lending against the security of commercial property is generally perceived to expose lenders to a greater risk of loss than lending against the security of residential property. Prospective Noteholders should be aware that the Borrower is a special purpose vehicle with limited access to capital beyond the net operating or rental income generated by the Properties it owns. Such cash-flow may be reduced, for example, upon termination of a lease, if a lease is not renewed or replaced or if operating expenses incurred by the property owner increase beyond those anticipated. Such cash-flow may also be reduced if capital expenditure is required to maintain or improve the property in order to comply with obligations to tenants, or to attract new tenants. In any of these circumstances, the Borrower s ability to make payments of interest and principal in respect of the Loan may be impaired. If, following the occurrence of a Loan Event of Default and following the exercise of all available remedies in respect of the Senior Finance Documents and the Properties, the Issuer does not receive all amounts owing in respect of the Senior Finance Documents, then the Noteholders (or the holders of certain classes of Notes) may receive, by way of principal repayment, an amount less than the face value of their Notes, and the Issuer may be unable to pay in full interest due on the Notes or certain classes of the Notes. Any such shortfall shall be extinguished and not revived thereafter in accordance with Condition 19 (Limited Recourse and Non Petition) and the provisions of the Issuer Deed of Charge and Assignment. The Issuer does not guarantee or warrant full and timely payment of any sums owing in respect of the Senior Finance Documents or the Properties. Retained Interest Under the Loan Sale Agreement, the Retained Interest Holder will retain (and not sell to the Issuer) the right to receive Retained Interest and will sell the Loan along with all other associated rights (including rights to receive payment of interest other than Retained Interest and including all accessory security rights) to the Issuer. The Issuer will therefore acquire rights to receive all interest on the Loan other than Retained Interest. Pursuant to the Retained Interest Holder Intercreditor Deed between the Retained Interest 36

37 Holder and the Issuer, the Retained Interest Holder s rights to payment of Retained Interest will take priority over the Issuer s rights to receive interest other than Retained Interest prior to the occurrence of a Loan Event of Default. For further information see The Transaction Documents The Loan Sale Agreement and Retained Interest Holder Intercreditor Deed. Loan Concentration The only substantial assets of the Issuer will be the Loan and the Related Security therefor. Accordingly, any losses on the Loan will have a more severe adverse effect on the Issuer and its ability to make payments in respect of the Notes than would losses in relation to a loan in a pool of loans held by the Issuer that accounted for a proportionately smaller percentage of the Issuer s aggregate assets. In addition, concentrations of properties in geographic areas may increase the risk that adverse economic or other developments or a natural disaster affecting a particular region could increase the frequency and severity of losses on the loan if it is secured by Properties concentrated in such areas. For further information on the location of the various Properties, see The Loan and the Related Property Summaries below. Tenant Concentration Both Major Subtenants are subsidiaries of KarstadtQuelle AG. A deterioration in the financial condition of the Major Subtenants or KarstadtQuelle AG would therefore be particularly significant. Properties leased to a small number of tenants or a sole tenant are also susceptible to interruptions of cash flow if leases are terminated or otherwise do not remain on foot. This is so because: (a) the financial effect of the absence of rental income may be severe; (b) more time may be required to release the space; and (c) substantial capital costs may need to be incurred to make the space appropriate for replacement tenants. Nature of Borrower The Borrower was established as a civil law partnership (Gesellschaft bürgerlichen Rechts) and has represented in the Senior Facility Agreement that it has not traded or carried on any business since the date of its incorporation except for the ownership and management of the Properties. Accordingly the Borrower has limited resources beyond the net operating income generated by the Properties. Such net operating income may be reduced due to a variety of circumstances which might affect one or more Properties, some of which are described below. In any of these circumstances, the Borrower s ability to make payments of interest and repayments of principal in respect of the Loan may be impaired. Pursuant to the Senior Facility Agreement each Senior Finance Party has agreed not to demand payment of principal, interest or any other amount under the Senior Facility Agreement or the other Senior Finance Documents from any partner of the Borrower (enforcement of rights under the Senior Security Documents against a party thereto is excluded from this provision however). The Borrower has given various positive and negative covenants in the Senior Facility Agreement for the purpose of maintaining its status as a limited purpose, property-owning vehicle. However, there can be no assurance that the Borrower will be able to comply with the positive and negative covenants contained in the Senior Facility Agreement, and even if all or most of such restrictions have been complied with by the Borrower, there can be no assurance that the Borrower will not nonetheless become insolvent. Litigation At any time after the Issue Date there may be pending or threatened legal proceedings against the Borrower or its affiliates. To the knowledge of the Originator, as at the Issue Date, there is no litigation or claim calling into question in any material way the Originator s or the Borrower Security Trustee s title to the Loan, the Related Security or any Land Charge. As has been reported in the media recently, KarstadtQuelle AG is currently involved in a dispute with the Wertheim family and 37

38 the Jewish Claims Conference concerning a property in Berlin which was sold by KarstadtQuelle AG in This dispute does not relate to any of the Properties and KarstadtQuelle AG has indicated that it will defend these claims in the courts. Media reports have suggested that any action will last in excess of five years. Currently it is not possible to estimate when the outcome of this dispute might be determined or the value of the payments (if any) to be awarded in respect of these claims. Refinancing and Disposal The Senior Facility Agreement requires the Borrower to repay the Loan in full on the Loan Final Maturity Date. However, the Loan does not by its terms amortise to zero by the Loan Final Maturity Date and, therefore, the ability of the Borrower to repay the Loan in full on the Loan Final Maturity Date will be dependent upon its ability to raise proceeds to refinance the Loan (Refinancing Proceeds) or proceeds from the sale of the relevant Properties (Disposal Proceeds). The ability of the Borrower to refinance the Loan by raising Refinancing Proceeds will be dependent, among other things, on the willingness and ability of lenders, which typically include banks, insurance companies and finance companies, to make loans secured on the Properties and, in certain cases, the Borrower s ability to enter into suitable swap arrangements in connection with such refinancing. The availability of funds in the loan markets fluctuates and there can be no assurance that Refinancing Proceeds in the amount required to refinance the Loan will be available to refinance the Loan on the Loan Final Maturity Date. The ability of the Borrower to repay the Loan by raising Disposal Proceeds from the disposal of its Properties will be dependent on the ability of the Borrower to find buyers at a suitable price. The availability of assets similar to the Properties and competition for available credit may have a significant adverse effect on the ability of the Borrower to refinance or sell its Properties. Similarly, a failure to maintain the Properties and carry out capital expenditure to preserve the rental value of the Properties may result in the liquidation or refinancing value of the Properties being less than the amount necessary to repay the Loan. Neither of the Issuer nor the Originator is under any obligation to provide any such refinancing or to purchase any Properties and there can be no assurance that the necessary Refinancing Proceeds or Disposal Proceeds would be raised. A failure to raise the necessary Refinancing Proceeds or Disposal Proceeds may result in a Loan Event of Default under the Senior Facility Agreement. In the event of a Loan Event of Default, the Noteholders, or the holders of certain Classes of Notes, may receive by way of principal repayment an amount less than the face value of their Notes and the Issuer may be unable to pay in full interest due on the Notes or certain classes of the Notes. Prepayment of the Loan A high level of prepayment in respect of the Loan, and/or the prepayment in full of the Loan, will result in a reduction in interest receipts in respect of the Loan which may result in a shortfall in the monies available to be applied by the Issuer in making payments of interest on the Notes. The prepayment risk will, in particular, be borne by the holders of the most junior classes of Notes then outstanding. The Borrower may be obliged, in certain circumstances, to prepay the Loan in whole or in part prior to the Loan Final Maturity Date. In particular the Borrower must prepay the Loan if: (1) it becomes unlawful for a Lender to perform its obligations under the Senior Facility Agreement or maintain participation in the Loan; (2) a Change of Control occurs and the Majority Lenders require; or (3) upon disposal of any Property. In addition, if the Borrower elects to deposit a portion of the Loan proceeds in the Cash Collateral Account and does not apply the amounts on deposit in accordance with the Senior Facility Agreement prior to the Loan Payment Date falling in April 2007, then the Borrower shall have the right partially to prepay the Loan. For further information see The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Prepayment below. These events may be beyond the control of the Borrower and are beyond the control of the Issuer. The Borrower has the right to prepay the Loan in whole or in part at any time after the last day of the availability period, or if earlier, the day on which the Available Senior Facility is zero subject to providing requisition notice. If the Borrower prepays the Loan in whole or in part, the Issuer will 38

39 effect a redemption of the Notes in accordance with Condition 6.2 (Mandatory Redemption from Available Principal Collections). Upon any prepayment of the Loan, it is likely that Notes will be redeemed at short notice. Further, as stated below in The Loan and the Related Security Description of the Mezzanine Facility Agreement and Intercreditor Arrangements, the Mezzanine Lender has the right to purchase the Loan if a Level 1 Senior Purchase Event occurs. If a Level 1 Senior Purchase Event were to occur and the Mezzanine Lender elected to purchase the Loan, it is likely that the Notes will be redeemed in full at short notice. For further information about yield, prepayment and maturity consideration, see Yield, Prepayment and Maturity Considerations below. Due Diligence The only due diligence (including valuations of Properties) that has been undertaken in relation to the Loan and the Properties is described below under The Loan and the Related Security Portfolio Due Diligence below. None of such due diligence will be verified or updated prior to the sale of the Loan to the Issuer. The Issuer will rely on the warranties given to it in respect of the Loan by the Originator in the Loan Sale Agreement. Breach of Warranty in relation to the Loan Except as described under The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Deed below, none of the Issuer, the Note Trustee or the Issuer Security Trustee has undertaken or will undertake any investigations, searches or other actions as to the status of the Borrower or any other matters relating to the Loan, the Related Security or the Properties. The Issuer, the Issuer Security Trustee and the Note Trustee will rely on the warranties given by the Originator in the Loan Sale Agreement. In the event of a material breach of representation or warranty by the Originator (as described in The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Deed below) which has not been remedied or is not capable of remedy, the sole remedy of each of the Issuer, the Note Trustee and the Issuer Security Trustee against the Originator shall be to require the Originator to either repurchase the Loan together with any Related Security or indemnify the Issuer against all losses, claims, demands, expenses, and all other expenses or liabilities incurred by the Issuer as a result of such material breach of representation or warranty, provided that this shall not limit any other remedies available to the Issuer, the Note Trustee and/or the Issuer Security Trustee if the Originator fails to repurchase the Loan and the Related Security or to indemnify the Issuer, in each case, when obliged to do so. For the avoidance of doubt, in connection with any such breach, the Originator is entitled to determine whether it will repurchase the Loan and Related Security or will indemnify the Issuer. In the event that the Originator repurchases the Loan and the Related Security or provides an indemnity pursuant to the Loan Sale Agreement, the Issuer will apply the purchase price paid to it or the indemnity payment, as applicable, in or towards repayment of the Notes (such amounts being included in the Available Principal Collections on the Payment Date following the end of the Interest Period in which such monies were received by the Issuer) in accordance with Condition 6.2 (Mandatory Redemption from Available Principal Collections). Rights of the Operating Advisor in relation to the Loan The Operating Advisor, on behalf of the Controlling Class, will have the right to require the Issuer to replace the person then acting as the Special Servicer and to be consulted with in relation to certain actions with respect to the Loan including, among other things, certain modifications, waivers and amendments of the Loan, the release of any security and the release of the Borrower s obligations under the Senior Facility Agreement. Neither the Servicer nor the Special Servicer will be permitted to act upon any direction given by the Operating Advisor, or to refrain from taking any action resulting from the consultation rights of the Operating Advisor, if so acting or refraining from acting would cause it to violate the Servicing Standard. There can be no assurance that any advice provided by the Operating Advisor will ultimately maximise the recoveries on the Loan. For further details of 39

40 the Operating Advisor s consultation rights, see The Transaction Documents The Servicing Agreement below. The Operating Advisor may act solely in the interests of the Controlling Class; the Operating Advisor does not have any duties to any Noteholders other than the Controlling Class; the Operating Advisor may take actions that favour the interests of the Controlling Class over the interests of the other Noteholders; the Operating Advisor will not be deemed to have been negligent or reckless, or to have acted in bad faith or engaged in wilful misconduct, by reason of its having acted solely in the interests of the Controlling Class; and the Operating Advisor will have no liability whatsoever for having acted solely in the interests of the Controlling Class, and no holder of any Class of Notes (other than the Controlling Class) may take any action whatsoever against the Operating Advisor for having so acted. Appointment of a Substitute Servicer or Substitute Special Servicer Prior to or contemporaneously with any termination of the appointment of the Servicer or the Special Servicer, it would first be necessary for the Issuer (or, after the service of a Note Acceleration Notice, the Note Trustee, either in its sole discretion or at the direction of the holders of twenty-five per cent. of the Principal Amount Outstanding of the Notes or pursuant to an Extraordinary Resolution of the Noteholders) to appoint a substitute servicer or, as the case may be, special servicer approved by the Note Trustee and in respect of whose appointment the Rating Agencies have confirmed that the applicable ratings of the Notes will not be downgraded, withdrawn or qualified as a result save that such confirmation of the Rating Agencies shall not be required if such appointment is agreed by an Extraordinary Resolution of each class of the Noteholders. The appointment of the person acting as the Special Servicer in relation to the Loan may also be terminated upon the Operating Advisor notifying the Issuer and the Note Trustee that it requires a replacement special servicer to be appointed. There is no guarantee that a substitute Servicer or Special Servicer could be found that would be willing to administer the Loan at a commercially reasonable fee, or at all, on the terms of the Servicing Agreement (even though the Servicing Agreement will provide for the fees payable to a substitute servicer or special servicer to be consistent with those payable generally at that time for the provision of commercial mortgage administration services). The fees and expenses of a substitute Servicer or Special Servicer would be payable in priority to payments due under the Notes. Workout Fees and Liquidation Fees In the event that a Specially Serviced Loan becomes a Corrected Loan and certain other conditions are met, as described under The Transaction Documents The Servicing Agreement Servicing Fee, Special Servicing Fee, Liquidation Fee and Workout Fee, the Special Servicer will be entitled to a Workout Fee for so long as the Loan remains a Corrected Loan. In addition, at any time after the Loan has become a Specially Serviced Loan, the Special Servicer will be entitled to receive a Liquidation Fee upon the sale of the Loan, the partnership interests in the Borrower or any of the Properties following enforcement of the Related Security. Workout Fees and Liquidation Fees may not in all cases be recoverable from the Borrower under the Senior Facility Agreement. Payments of Workout Fees and Liquidation Fees will be made by the Issuer in accordance with the relevant Priority of Payments and will be made in priority to amounts due to the Noteholders and therefore payment of any such fees may reduce amounts payable to the Noteholders. Risks relating to Conflicts of Interest Conflicts of interest may arise between the Issuer on one hand, and the Originator and/or affiliates, on the other hand, because the Originator and certain of its affiliates intend to continue actively to service, acquire, develop, finance and dispose of real estate-related assets in the ordinary course of their business. During the course of their business activities the Originator or those affiliates may operate, service, acquire or sell properties, or finance loans secured by properties, which are in the same markets as the Properties. Moreover, the Originator may currently act, and at any time in the future act (with or without other parties and directly or via affiliates) as financiers under additional credit facilities made available to the Borrower or any affiliate of the Borrower. The Originator may have additional credit exposure to the Borrower because the Borrower is also a guarantor in respect of the Mezzanine Loan and the Mezzanine Loan Borrower is one of the Partners in the Borrower. In 40

41 such cases, the interests of the Originator or those affiliates may differ from, and compete with, the interests of the Issuer, and decisions made with respect to those assets may adversely affect the value of the Properties and therefore, ultimately, the ability of the Issuer to make payments under the Notes. There will be no restrictions on either the Servicer or the Special Servicer preventing them from servicing loans for third parties, including loans similar to the Loan. The properties securing any such loans may be in the same market as the Properties. Consequently, personnel of the Servicer or the Special Servicer, as the case may be, may perform services on behalf of the Issuer with respect to the Loan at the same time as they are performing services on behalf of other persons with respect to similar loans. Likewise, the Servicer may service, acquire, develop, operate, finance or dispose of real estate-related assets in the ordinary course of their business. Despite the requirement on each of the Servicer and the Special Servicer to perform their respective servicing obligations in accordance with the terms of the Servicing Agreement (including the Servicing Standard, as defined below), such other servicing obligations or other activities may pose inherent conflicts for the Servicer or the Special Servicer. Furthermore, as the Servicer and the Special Servicer may each acquire Notes, either of them could, at any time, hold any or all of the most junior Class of Notes outstanding from time to time. As holder of that Class of Notes, the Servicer or the Special Servicer (as applicable) may have interests which conflict with the interests of the holders of the more senior classes of Notes from time to time. However, each of the Servicer and the Special Servicer will be required under the Servicing Agreement to perform its duties and to act in the best interests of the Issuer generally and without regard to any fees or compensation to which it is entitled, its ownership or the ownership of any of its affiliates of an interest in the Notes or any relationship it, or any of its affiliates, may have with the Borrower or any party to a Finance Document. Additional Indebtedness and other Liabilities The Senior Facility Agreement contains a general prohibition on the Borrower incurring or having outstanding any Financial Indebtedness. There are certain limited exceptions to this prohibition. For further information see The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings General Undertakings at paragraphs (l) and (m). One of the exceptions to the prohibition is that the Borrower may incur Financial Indebtedness under the Mezzanine Loan (the Borrower being a guarantor in respect of the Mezzanine Borrower s obligations under the Mezzanine Loan). However, the rights of the Mezzanine Lender, both as regards enforcement of security common to both the Loan and the Mezzanine Loan and as regards rights to payment by the Borrower, are subordinated to the rights of the Issuer pursuant to the Loan Intercreditor Agreement. For further information see The Loan and the Related Security Description of the Mezzanine Facility Agreement and Intercreditor Arrangements below. Risks Relating to the Hedge Documents The Borrower has entered into the Hedge Documents with respect to interest payable on the Loan. For further information see The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings General Undertakings at paragraphs (u) to (x). The Hedge Documents are required to have an aggregate notional principal amount of not less than the principal amount outstanding of the Loan plus the principal amount of the Mezzanine Facility. The effect is that at all times the Borrower s obligations under the Loan will be hedged against adverse movements in prevailing interest rates. The required aggregate notional principal amount will amortise over the term of the Loan. There can be no assurance that the aggregate notional amounts of the hedging transactions under the Hedge Documents will not become less than or greater than the principal amount outstanding of the Loan. As a result the Borrower may be obliged to pay more to the Counterparty than it would if the aggregate notional amounts had amortised in the same amount as the actual loan, and consequently there will be less amounts available to make all scheduled and anticipated payments and repayments in respect of the Loan and consequently the Notes. 41

42 Factors Relating to the Properties The Properties The Loan is fully secured by, amongst other things, land charges over the Properties. The repayment of the Loan may be, and the payment of interest on the Loan is, dependent on the ability of the Properties to generate cash-flow. There are two primary risks involved in relation to the Properties: (a) that underlying Property cash flows will be insufficient to service the interest payments and principal repayments over the life of the Loan and (b) that proceeds from the sale or refinancing of the Properties will be insufficient to repay the Loan at maturity. In both cases, the ongoing performance by the Borrower under the Senior Facility Agreement may be impaired, which may affect the Issuer s ability to make payments under the Notes. The income-producing capacity of, and accordingly the cash-flow from, the Properties may be adversely affected by a large number of factors (for example the age and design of the Property, the creditworthiness of tenants and real estate market conditions). The ability of the Borrower to perform will depend upon the continuity of substantial rental payments under the Leases. The Properties are used in connection with the operation of retail businesses (either directly in the case of those Properties used as retail stores or indirectly in the case of those Properties used in other ways in connection with retail businesses, such as car parking, logistics and back office space). The performance of the retail sector in Germany may therefore have a particular impact on the value of the Properties. Retail properties face competition from other retail properties and from other forms of retailing outside a given property market such as mail order and catalogue selling, discount shopping centres and selling through the internet, which may reduce a retailer s need for space in respect of retail premises. The continued growth of these alternative forms of retailing could adversely affect the demand for space and, therefore, the value of, and rents collectable from, retail properties. Other factors which could have an impact on the value of a Property are more general in nature, such as: national, regional or local economic conditions (including plant closures, industry slowdowns and unemployment rates); local property conditions from time to time (such as an oversupply or under supply of space); demographic factors; consumer confidence; consumer tastes and preferences; retrospective changes in building codes or other regulatory changes; changes in governmental regulations, fiscal policy, planning/zoning or tax laws; potential environmental legislation or liabilities or other legal liabilities; the availability of refinancing; and changes in interest rate levels or yields required by investors in income-producing commercial properties. All of the Properties are located in Germany. For further information about the legal and regulatory regimes prevailing in Germany insofar as they relate to the Loan, see in particular Risk Factors Factors Relating to the Related Security. The terms of the tenancies might affect the realisable value of the Properties. The Senior Facility Agreement restricts the ability of the Borrower to permit or allow to occur any Disposals (which would include the granting of leases), however, the Borrower may lease the Properties to the Master Lessee pursuant to the Master Lease Agreement. The Senior Facility Agreement also provides that: (i) the Borrower must assure that the Master Lessee has not assigned any of its rights under the Master Lease Agreement; (ii) the Borrower will not, and will procure that the Master Lessee will not, consent to any new Material Sublease or agree to the amendment, extension, assignment or waiver of any provisions of any Material Sublease without the prior approve of the Facility Agent; and (iii) the Borrower will not amend, modify, extend or waive any of the provisions of the Master Lease or assign any rights thereunder. See paragraphs (g), (h), (r), (bb) and (cc) of The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings General Undertakings. Any one or more of the factors above described could operate to have an adverse effect on the income derived from, or able to be generated by, a particular Property, which could in turn cause the Borrower to default on the Loan, or impair the ability of the Borrower to refinance the Loan or sell the Property and may result in the liquidation value or refinancing value of the Property being less 42

43 than the amount required to repay the Loan advanced against such Property. This would, in turn, negatively impact the Issuer s ability to pay interest on, and repay the principal of, the Notes. The Tenants and the Leases The ability of the Borrower to make payments under the Senior Facility Agreement will be substantially dependent on payments being made as required under the Master Lease and the Permitted Subleases. If a significant amount of rental payments are not received on or prior to a Loan Payment Date and any resultant shortfall is not otherwise compensated for from other resources, there may be insufficient cash available to the Borrower to make payments to the Issuer under the Loan, which could result in a Loan Event of Default. Such a Loan Event of Default may not itself result in a Note Event of Default since the Issuer may have access to funds made available under the Liquidity Facility to make certain payments under the Notes. However, no assurance can be given that the Liquidity Facility will, in all cases and in all circumstances, be sufficient to cover any such shortfall and that a Note Event of Default will not occur as a result of the late payment or non-payment of rents. Where the Borrower, as landlord, is in default of its obligations under a tenancy, a right of set-off could, with certain limitations, be exercised by a tenant of the relevant Property in respect of its rental obligations. The Leases on any of the Properties may terminate earlier than their contractual expiry date if the tenant surrenders the Lease or defaults under the Lease or a force majeure event occurs leading to such tenants being freed from their obligations under their leases. There can be no assurance that leases on terms (including gross rents and service charges payable, and covenants of the landlord and tenant) equivalent to the Leases on the Properties as at the Issue Date will be achievable in the future, that market practices in Germany will not have changed, or that changes in law in Germany will not limit the terms of Leases in respect of any Property entered into after the Issue Date. Any one or more of the factors described above could operate to have an adverse effect on the income derived from, or able to be generated by, a particular Property. If a significant number of Properties were affected, this could cause the Borrower to default on the Loan, or impair the ability of the Borrower to refinance the Loan or sell Properties and may result in the liquidation value or refinancing value of the Properties being less than the amount required to repay the Loan. The Rent Accounts The Senior Facility Agreement requires the Borrower to, or to cause the Master Lessee to, open and maintain the B Portfolio Rent Account and the Rent Account (either in the name of the Borrower or the Master Lessee). The Borrower must: (i) ensure that rent payments under the Master Lease are paid into the B Portfolio Rent Account; and (ii) cause the Master Lessee to instruct the Major Subtenants to pay amounts due by them under the Permitted Subleases into the B Portfolio Rent Account. Amounts deposited in the B Portfolio Rent Account in any interest period will be disbursed by the Facility Agent (after paying the Quarterly Capex Instalment for the relevant Interest Period into the B Portfolio Capex Maintenance Account) into the Rent Account. On each Loan Payment Date (unless a Payment Default under the Loan or a Loan Event of Default is continuing) amounts deposited in the Rent Account will be used (subject to the priority of payments set out in the Senior Facility Agreement) to pay amounts due to the Lender under the Senior Facility Agreement. The Facility Agent will have signing authority on the B Portfolio Rent Account and the Rent Account. For further information see The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts The Structure of the Accounts B Portfolio Rent Account and Rent Account. A failure to control rental payments in the manner contemplated could cause the Borrower to default under the Senior Facility Agreement or impair the ability of such Borrower to refinance the Loan or sell its Properties and may result in the liquidation value or refinancing value of the Properties being less than the amount necessary to repay the Loan in full. 43

44 Insurance The Senior Facility Agreement contains provisions requiring the Borrower to insure the Properties against the loss or damage by fire, storm, tempest, terrorism (coverage for terrorism losses may be limited to an aggregate amount equal to 25 per cent. of the reinstatement value of the Properties), flood, earth quake, lightening, explosion, impact, aircraft and other aerial devices and articles dropped from them, riot, civil commotion and malicious damage, bursting or overflowing of water tanks, apparatus or pipes and such other risks and contingencies as are insured in accordance with bound commercial practice or which the Facility Agent may direct from time to time. Insurance must also be maintained against product and third party and public liability risks. See paragraph (k) and (l) The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings Property Undertakings. The Senior Facility Agreement provides that the Borrower must provide the Borrower Security Trustee with a certificate of third party interest ( Sicherungsschein or Sicherungsbestätigung ) evidencing that the insurance policies are maintained for the account and benefit of the Borrower Security Trustee in respect of the insurance policies maintained by each Borrower (each, an Insurance Policy and together, the Insurance Policies). Such certificates of third party interest form part of the Senior Security Documents. The Borrower is required to maintain the Insurance Policies with substantial and reputable insurance underwriters or insurance companies. If a claim under an Insurance Policy is made, but the relevant insurer fails to make payment in respect of that claim on a timely basis or at all, this could prejudice the ability of the Borrower to make payments in respect of the Loan, which would in turn prejudice the ability of the Issuer to make payments in respect of the Notes. A failure by the Borrower to keep the relevant insurance policies current in respect of a relevant Property may, on the occurrence of any damage to such Property or loss of rent thereon, which would otherwise have been recoverable under such insurance policy, result in a corresponding loss in the value of such Property or payment recovery under the Loan. However, this risk is mitigated by the fact that, if the Borrower does not comply with its obligation under the Senior Facility Agreement with respect to any Insurance Policy, the Facility Agent may effect or renew any such insurance policy in its own name. See further paragraph (r) of The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings Property Undertakings. Certain types of risks and losses (such as losses resulting from war, terrorism, nuclear radiation, radioactive contamination and heaving or settling of structures) may be or become either uninsurable or not economically insurable or are not covered by the required insurance policies. Other risks might become uninsurable (or not economically insurable) in the future. If an uninsured or uninsurable loss were to occur, the Borrower might not have sufficient funds to repay in full all amounts owing under or in respect of the Senior Facility Agreement. Compulsory Purchase and Expropriation of Properties A Property may at any time be compulsorily acquired by, among others, a local or public authority or a governmental department on public interest grounds, for example, a proposed redevelopment or infrastructure project. No such compulsory purchase proposals were, however, revealed in the course of the due diligence undertaken by the Originator prior to the Issue Date. The legal rules in Germany relating to compulsory purchase of property provide that owners and occupiers of a property subject to a compulsory purchase proposal will be entitled to receive a market value oriented price for the property. In the context of the Properties, there can be no assurance, however, that the compulsory purchase price would be equal to the amount or portion of the Loan secured upon such Property or Properties or that the compulsory purchase price would be paid prior to the Loan Final Maturity Date. If a significant number of Properties were affected, this could undermine the ability of the Borrower to repay the principal of the Loan. Moreover, a compulsory purchase order in respect of a Property may have the effect of releasing the tenants thereof from their obligations to pay rent. If a Property was so affected, this could undermine the ability of the Borrower to pay interest on the Loan. 44

45 There is often a delay between the compulsory purchase of a property and the payment of compensation, the length of which will largely depend upon the ability of the property owner and the entity acquiring the property to agree on the market value of the affected property, or other means of determining the amount of compensation payable upon a compulsory purchase. Should such a delay occur in the case of a Property, then, unless the Borrower has other funds available to it, an event of default may occur under the Senior Facility Agreement. The Borrower is required under the Senior Facility Agreement to ensure that compensation received in respect of a compulsory purchase of a property is promptly paid into the Sales Account. Such amounts will then be applied (to the extent required and subject to the priority of payments set out in the Senior Facility Agreement) to prepay the Loan in the Aggregate Release Amount of the relevant Property. The proceeds of such prepayment will be paid, ultimately to the Issuer and will be applied by the issuer to redeem the Notes (or part thereof). See further paragraph (b) of The Structure of the Accounts Sales Account ; The Loan and Related Security Description of the Loan and the Related Security and the Structure of the Accounts Prepayment Mandatory Prepayments ; and paragraph (j) of The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings Property Undertakings. Pre-emption rights It cannot be ruled out that some of the Properties may be subject to pre-emption rights including, among other things, pre-emption rights in favour of the landlords who have granted heritable building rights which the Borrower owns or pre-emption rights in favour of municipalities in respect of properties situated in re-grouping areas (Umlegungsgebiete), renewal and/or redevelopment areas (Sanierungs- und/oder Entwicklungsgebiete) or areas subject to a preservation of certain neighbourhood ordinances (Erhaltungssatzung). The pre-emption right will only be triggered in case of the sale of the relevant property, but not in case of the sale of hereditary building rights. Where pre-emption rights exist, it will not be possible to dispose of the affected Properties without first notifying the holders of such pre-emption rights and giving them an opportunity to purchase or to waive the pre-emption right. Moreover there could be a delay in reaching agreement on the price to be paid in respect of such pre-emption, though it should be noted that the Senior Facility Agreement restricts the Borrower s right to sell a Property and the terms upon which a Property may be sold (see further paragraphs (g) to (k) of The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts Undertakings General Undertakings.) Property Expenses Maintaining the value of the Properties is dependent, to some extent, on undertaking periodic capital expenditure in respect thereof. In the ordinary course of events, the Borrower will fund such capital expenditure out of cash-flow generated by the Properties. This will also be undertaken through the Deferred Capex Programme. If the necessary capital expenditure is not undertaken, this could lead to a diminution in the value of the relevant Properties, impacting on the liquidation or refinancing value thereof and hence the ability to generate sufficient Disposal Proceeds or Refinancing Proceeds. The possibility of such diminution in value could be heightened if enforcement proceedings following a Loan Event of Default are protracted. Life Annuities (Leibrenten) The following Properties are encumbered with the obligation to pay a life annuity (Leibrente): Goslar, Rosentorstrasse 1 (WE ), München, Bahnhofsplatz 7 (WE )*, Hamburg, Sachsentor 33/ Bergdorfer Schloß (WE )* and Celle, Bergstrasse 1 (WE ). Life annuities are normally agreed in form of real charge (Reallast) which creates a right in rem in addition to the contractual obligation to pay the purchase price under a property acquisition agreement. If the property is sold, the new owner becomes liable because of the real charge in addition to the purchaser, who remains liable contractually to pay the life annuity. * Sale of the Property not yet completed. Property is currently cash collateralised. 45

46 Such life annuities rank ahead of mortgages which are registered later and can therefore negatively impact on the valuation of the encumbered property. Redevelopment Areas (Sanierungsgebiete) Approximately nine of the Properties are located in redevelopment areas (Sanierungsgebiete). Urban refurbishment measures are taken by local authorities where an area does not meet general requirements for healthy and safe living and working conditions or if the area is significantly impeded in the fulfilment of the tasks that its location and function dictate. Once a local authority has established a refurbishment area by the passing of the refurbishment bylaw ( 142 of the Federal Building Code Baugesetzbuch) and the by-law has become legally binding, an urban refurbishment notice (Sanierungsvermerk) is entered into the land register. Pursuant to 144 of the Federal Building Code, a comprehensive freeze on alteration and disposition then comes into force. Actions taken with regard to Properties in a registered refurbishment area, such as disposal of property, the creation or disposal of a Heritable Building Right (Erbbaurecht) or any creation of an encumbrance, require the written approval of the local authority ( 144 of the Federal Building Code). Such approval may only be denied in cases where such action would impair the execution of the refurbishment. As at April 2006, refurbishment notices are registered in relation to approximately ten of the Properties (the Refurbishment Properties). As of the Cut-Off-Date, in the case of six Refurbishment Properties, the necessary consent was obtained and the Land Charges have been duly registered. For the remaining three Refurbishment Properties, the necessary consent still needs to be obtained. Refurbishment measures usually result in an increase in value of the relevant plots of land. The owner must pay the local authority an amount of money by way of equalisation for this increase in value, corresponding to the difference between the initial value and the final value. There is a risk that equalisation payments amount to significant sums. Neighbouring Leaseholds (Nachbarerbbaurecht) In the case of a number of Properties, a building was not erected on one specific real estate but extended over several real estates. Usually, the relevant seller of the Property held a freehold interest in one of the real estates concerned and had safeguarded the erection of the building on the adjacent real estates by way of a leasehold. The legal situation and admissibility of such a neighbouring leasehold (Nachbarerbbaurecht) is uncertain due to a 1973 ruling of the German Federal Civil Court (Bundesgerichtshof) which has held in an obiter dictum that a leasehold agreement is invalid to the extent the parties had agreed that the beneficiary shall be entitled to erect a single building on several real estates, including the property or properties encumbered with a leasehold. Accordingly, any registration of a leasehold in the land register would be void and might be deleted any time. Decisions by the appellate courts of Düsseldorf and Stuttgart have disregarded the 1973 decision of the German Federal Supreme Court because of its obiter dictum character and approved the registration of neighbouring leaseholds. Legal scholars are divided into two camps, one arguing in favour of, the other against the admissibility of neighbouring leaseholds. It can not be ruled out that the German Federal Supreme Court would confirm its view expressed in the 1973 ruling if this issue had to be decided again. The consequences of the potential voidness of the leasehold agreement are disputed in legal literature. While some scholars favour an application of the law regarding encroachments by way of analogy, others are of the opinion that the void agreement should be reinterpreted into a normal lease agreement. However, both approaches have their drawbacks and would in any case provide a lower degree of protection of the beneficiary s rights as compared to a regular leasehold title. If a leasehold agreement in respect of a Property is held to be void this may affect the Borrower s ability to pay interest and principal on the Loan. 46

47 Maintenance Obligations Under the Master Lease and Permitted Subleases, the Master Lessee and Major Subtenants have responsibility for the maintenance and repair of the Properties (although the Borrower is required to reimburse the Master Lessee in respect of exceptional expenditures related to the structure, roof and exterior (Dach und Fach) of the Properties). Under the Permitted Subleases, the Master Lessee assumes responsibility for maintenance and repair of the roof and divisions while the relevant Major Sub-Tenant assumes responsibility for maintenance of the remainder of the Properties leased. The Major Subtenants are also obliged, within the first two years of the Permitted Subleases, to correct defects that are specified in the schedule to each Permitted Sublease entitled Defects. To the extent such work relates to the Roof and Divisions it will be the responsibility of the relevant Major Sub- Tenant rather than the Master Lessee. For further information see: The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Master Lease Transfer ; The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Master Lease Maintenance and Repair ; The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Permitted Subleases Transfer; and The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Permitted Subleases Maintenance and Repair. Property Management The Properties are managed by Archon Group Deutschland GmbH as managing agent (the Managing Agent) as to general upkeep and day-to-day operations, pursuant to the Asset Management Services Agreement. The Managing Agent has broad administration obligations. In particular, the Managing Agent has responsibilities in the administration of tenancies, preparing and presenting finance and investment strategies, controlling and accounting, and involvement in tax compliance and planning. The Issuer has the benefit of duty of care obligations under the Asset Management Services Agreement. There can be no assurance that a substitute Managing Agent is found in a timely fashion should the Property Management Agreement be terminated, which may impede efficient management. None of the Issuer, the Originator or the Noteholders has the right to participate in property management. The net cashflow realised from and/or the residual value of the Properties may decline following bad management performance which may disturb the Issuer s ability to make payments under the Notes. Limitations of Valuations According to the Initial Valuation, the aggregate market value of the Properties as at the date of the Initial Valuation was A1,707,946,387. In general, valuations represent the analysis and opinion of qualified valuers and are not guarantees of present or future value. One valuer may reach a different conclusion than the conclusion that would be reached if a different valuer were appraising the same property. Moreover, there can be no assurance that the market value of the Properties will continue to equal or exceed such valuation. As the market value of the Properties fluctuates, there can be no assurance that the market value of the Properties will be equal to or greater than the unpaid principal and accrued interest and any other amounts due under the Senior Facility Agreement. The Initial Valuation was made under certain assumptions. Should any of the assumptions prove to be incorrect, the actual market value of the Properties may fall below the market value of the Properties determined by the Initial Valuation. Moreover, valuations seek to establish the amount which a typically motivated buyer would pay a typically motivated seller. If the Properties are sold following a Loan Event of Default, there can be no assurance that the aggregate net proceeds of such sales will equal or exceed the value of the Properties as set out in the Initial Valuation or will be sufficient to pay in full all amounts due under the Senior Facility Agreement. The Senior Facility Agreement requires the Borrower to commission annual Valuations of the Properties. If, based on a Valuation, an Appraisal Reduction is deemed to have occurred, the amount available to be drawn under the Liquidity Facility will be reduced in proportion to the amount of the Appraisal Reduction by an amount, expressed as a percentage, equal to the Appraisal Reduction divided by the aggregate appraisal value of the Properties immediately prior to such Appraisal Reduction. 47

48 The occurrence of an Appraisal Reduction will also have an effect on certain of the rights of the Noteholders of one or more Classes, commencing with the holders of the most junior Class of Notes outstanding, as more particularly described in Condition 6.7 (Appraisal Reduction). If an Appraisal Reduction is deemed to have occurred, the principal amount outstanding on the most junior Class of Notes then outstanding will be reduced for such purposes by an amount equal to such Appraisal Reduction until the principal amount outstanding of such Class is reduced to zero, whereupon the principal amount outstanding of the next most junior Class or Classes of Notes will be reduced accordingly until the entire amount of the Appraisal reduction has been applied. Environmental Matters The Environmental Report, as it relates to environmental matters, was not designed as a comprehensive investigation to cover all existing contaminants on the Properties. Rather, the intention was to gain a general understanding about the main contaminants present at the Properties. It therefore cannot be ruled out that contaminants in addition to those identified in the Environmental Report may be present on the Properties. The Legal Due Diligence Report also identified several environmental matters in relation to the Properties. Among the environmental pollutants identified by the Environmental Report and/or the Legal Due Diligence Report were artificial material fabrics classified as harmful if released, asbestos fabrics and certain soil contaminants. Few of the issues identified require immediate action to be taken, and to the extent that such action is required, it has been included in the maintenance obligations of the Major Subtenants under the Permitted Subleases (for further information concerning these maintenance obligations, see The Loan and the Related Security Description of the Master Lease and Permitted Subleases the Permitted Subleases Transfer ). Under German Law, the rules on rehabilitating contaminated sites are contained primarily in the Federal Soil Protection Act (Bundesbodenschutzgesetz). The persons who may be responsible for the rehabilitation of a particular property include, among others, (a) any person who caused harmful change to the soil (Handlungsstörer) and such person s universal successor (Gesamtrechtsnachfolger), (b) the owner of the property (Zustandsstörer) and, under certain conditions, the former owner, and (c) the party exercising actual control over the property. Any of such persons can be held liable by the competent public authorities for the soil and/or groundwater investigation monitoring and cleanup. The public authority will select the responsible person by way of discretionary decision which must be guided by the greatest possible effectiveness of the resulting work. The cost of any environmental surveys, monitoring, clean up, decontamination or other activities taken to address environmental risk when imposed on the Borrower may affect its ability to service its debts. When such measures or their costs are imposed on a tenant, this might affect its ability to pay rents to the Borrower and so affect the Borrower s ability to service its debt. It might also adversely affect the value of the related Property and consequently the security (especially the land charge) granted by the Borrower. If an environmental liability arises in relation to any Property and is not remedied, or is not capable of being remedied, this may result in an inability to sell the Property or in a reduction in the price obtained for the Property, resulting in a sale at a loss. In addition, third parties may bring a claim against a current or previous owner, occupier or operator of a site for damages and costs resulting from substances emanating from that site, and the presence of substances on the Property could result in personal injury or similar claims by private plaintiffs. In addition, under German law, a tenant might be entitled to suspend or reduce its obligations to pay rent if its quiet enjoyment under a lease is disrupted as a consequence of the leased property being contaminated. This may affect the Borrower s ability to service its obligations under the related Loan. In addition, third parties may bring a claim against a current or previous owner, occupier or operator of a site for damages and costs resulting from substances emanating from that site. Listed Buildings and Heritage Protection Approximately six Properties in the Portfolio are (at least in part) in buildings that are protected as historic monuments (Denkmalschutz). Monument protection imposes restrictions on the use of the properties and the entire site, and the owner is obliged to maintain the protected building and its environment. 48

49 Mining Damages The Legal Due Diligence Report identified that at least two Properties are located in areas where mining activities were formerly conducted (these are the Properties at Mülheim, Humboldtring 5 and Iserlohn, Schillerplatz 5-10). Due to the location of these Properties, damages to buildings caused by mining activities cannot be ruled out. Liability for damages caused by mining operations is generally covered by the Federal Mining Act (Bundesberggesetz) or, depending on the termination date of the mining activities, by the former mining acts of the respective Federal States. In principal, the former owner of the mining permit and the operator of the mines will be liable for any damages. However, depending on the date of termination of the mining activities, restrictions to such liability might apply. In respect of the Property at Mülheim, claims to compensation with regard to damages caused by mining operations up to a loss of total value of the property of five per cent. have been waived. In respect of the Property at Iserlohn, any claims to compensation with regard to damages caused by mining activities have been waived. Restitution Claims in the Former German Democratic Republic There is one Property in the portfolio with respect to which a restitution claim has been raised, being the Property in Dresden (Pragerstrasse 12 (WE 58359)). For this Property an investment priority order according to the Act on the Priority of Investments in case of Restitution Claims under the Property Act (Gesetz über den Vorrang für Investitionen bei Rückgabeansprüchen nach dem Vermögensgesetz) was issued. In case of an unappealable investment priority order, a property may be transferred despite existing restitution claims and the restitution claimant will only receive a financial compensation. In 1993, the claimant abandoned all appeals against the investment priority order and received a compensation payment. Subsequently, proceedings of the claimant have been suspended by court in The Seller is registered owner of the property since The Issuer was as of the date of this Prospectus not in a position to clarify if the proceedings which were suspended, have been finally settled or if a restitution claim could in theory still be raised. The loan due diligence has not revealed any further Properties in respect of which restitution claims have been made. Munich, Bahnhofsplatz 7 (WE ) As stated in The Loan and the Related Security The Loan and the Related Property Summaries, the Property located at Munich, Bahnhofsplatz 7 is one of the five largest assets in the Portfolio. The Legal Due Diligence Report states that the heritable building right in respect of this Property expired on 30 September Consequently, the seller under the Real Property Purchase Agreement has no registered heritable building right in respect of this Property and, consequently, no land charge may be registered over it until this situation is rectified. The parties to the Real Property Purchase Agreement are currently working to address this situation. However, if no new heritable building right is obtained, the conditions precedent to the sale of this Property to the Borrower under the Real Property Purchase Agreement will not be fulfilled and it will not be acquired by the Borrower. In this case the amount held in the Cash Collateral Account on account of the purchase price of this Property would be repaid as a prepayment of the Loan. Factors Relating to the Related Security Registration of Real Property Rights The Land Charges will only come into existence, and transfer of title will only become effective, upon due registration in each relevant land register. The notaries have filed for registration of the Land Charges on all but 15 Properties (including all Properties the sale of which has been completed) with the relevant land registers. As at the Cut-Off Date, in respect of 23 Properties which largely consist of Properties in relation to Hereditary Building Rights or Redevelopment Areas the registration has not yet been effected, mainly because the relevant consents have not yet been obtained. While such filing should in the normal course of events enable 49

50 due registration of the Land Charges over the Properties with their agreed ranking, the Issuer will be exposed to all risks inherent in the registration process. The creation of the Land Charges may occur only after the Closing Date, and evidence thereof in the form of an extract from the land registers will only be available after the Closing Date. As at the date of this Prospectus the conditions precedent to the closing of the sale of 92 Properties have been fulfilled and their sale to the Borrower has taken place. Applications for registration of transfer of ownership of the Properties in the relevant land register have been made in respect of all but 25 of the Properties which have been sold to the Borrower. Registration of transfer has occurred in respect of eight Properties. Rank of the Land Charges The Land Charges have been granted at the highest available rank. Accordingly, they will rank first, unless there are mortgages in Division III or other encumbrances in Division II of the land register that rank in priority. In the case of the Property in Nürnberg, Wandererstrasse 159 (WE / ) there are four prior registered mortgages in Division III of the land register. The registered creditors in respect of all four prior mortgages are (unknown) heirs of Anna Krenn and they secure the amounts of A511.29, A511.29, A4, and A4, respectively. Heritable Building Rights The Portfolio Due Diligence determined that 12 Properties located in Hamburg Osterstrasse 111 (WE )*, Bremen Davoser Strasse 75 (WE )*, Trier Simeonstrasse 46 (WE )*, Bielefeld Herforder Strasse 9 (WE )*, Bamberg Maximilianplatz (WE ), Gütersloh Königstrasse 1 (WE ), Nürnberg Vordere Insel Schütt 3 (WE )*, Bonn Poststrasse 23 (WE )*, Göttingen Weender Strasse 12/16 (WE )*, Landshut Ländtorplatz 1 (WE ), München Schließheimer Strasse 93 (WE ) and Köln Breite Strasse (WE ) are subject to Heritable Building Rights (Erbbaurechte). Furthermore it was determined that there are twelve Properties which comprise economic units that have been constructed upon land parcels held as a mix of freehold title and heritable building rights. These are Botropp Hansa-Strasse 7 (WE )*, Celle Bergstrasse 1 (WE ), Hamburg Schloßmühlendamm 2 (WE ), Neumünster Großflecken 4-10 (WE )*, Bayreuth Maximilianstrasse (WE )*, Bremen Vor dem Steintor 74/76 (WE ), Hamburg Sachsentor 33 (WE )*, Memmingen Königsgraben 3 (WE ), Neumünster Großflecken 4-6 und 10 (WE ), Offenburg Lindenplatz 3 (WE )*, München Bahnhofplatz 7 (WE )* und Nürnberg Königstrasse 14 (WE )*. Heritable Building Rights require the consent of the relevant landowner (Grundstückseigentümer) (a) to register the relevant Land Charge and (b) to dispose of the Heritable Building Rights in an enforcement of the relevant mortgage (the Consent Properties). No assurance can be given that the relevant landowner will grant such consent. If the latter consent to create the relevant Land Charge is not granted, the relevant Land Charge will not be entered in the land register and, therefore, will not come into existence. However, in case of such refusal, the Borrower may initiate court proceedings to seek a court order to replace the landlord s consent to the mortgage with the consent of the court based on a need for legal relief. There may be some delay in obtaining such order and there can be no assurance that a court will make an order replacing the relevant landlord s consent with that of the court. Furthermore, such consent might only be granted with respect to a mortgage having a nominal value that is substantially lower than the value of the Heritable Building Right as determined in the Initial Valuation. In order to enforce the Land Charges granted over the Heritable Building Rights by way of compulsory sale (Zwangsversteigerung), the relevant landowner must grant an additional (express) consent to such enforcement by way of compulsory sale. The absence of such consent to enforcement by way of compulsory sale can result in a delay in the enforcement process in respect of the relevant * Sale of the Property not yet completed. Property is currently cash collateralised. 50

51 Property of several months and may in some circumstances prevent an enforcement of the Land Charge by way of compulsory sale if the relevant consent cannot be obtained from the landlord or alternatively from the court. However, where the relevant landowner withholds its consent without good cause, the relevant Borrower as well as the Borrower Security Trustee enforcing the Land Charge by way of compulsory sale may apply to court for an order replacing the landlord s consent with that of the court thereby allowing the enforcement by way of compulsory sale over the relevant Property, if the Borrower or, as the case may be, the Borrower Security Trustee, can establish among other things, that such consent to enforcement is necessary in the circumstances. Excessive Security Pursuant to certain rules of German law, security which is excessive as at the First Utilisation Date of the Loan (anfängliche Übersicherung) will result in the relevant security arrangement being void. In the event of subsequent excessive security (nachträgliche Übersicherung), any portion of the collateral considered to be excessive would have to be released from the security. Pursuant to the relevant court precedents, the liquidation value that can be expected to be realised in insolvency proceedings against the provider of the security would be relevant in determining if excessive security exists. No assurance can be given as to how a competent court would view the security structure for the Loan, in particular with regard to the Related Security provided for in respect of the obligations of the Borrower under the Senior Facility Agreement. The security granted pursuant to the Senior Finance Documents should not be deemed to be excessive because the security has been sized according to the value of the Loan, plus interest as well as anticipated costs and fees (including, among other things, anticipated enforcement costs), which is in line with commercial lending practices and is based on expected foreclosure proceeds; however, no assurance can be given that the Related Security will not be found to be excessive under the applicable rules of German law. If a German court were to find the security excessive, the amount of security could be voided or reduced. This could affect the secured claims of the Issuer in the event of an insolvency of the Borrower. Encumbrances over the Properties The Properties are subject to various types of encumbrances registered in Division II of the land register and the heritable land register (Abteilung II des Grundbuchs und Erbbaugrundbuchs), including, without limitation, easements in favour of local government authorities and other third parties life annuities (Leibrente), a permanent rights of use (Dauernutzungsrecht), restrictions on building (Bauverbot) and, in the case of heritable building rights, rights securing payment of heritable building rent (Erbbauzinsreallast). Insolvency of the Borrower; Enforcement of the Related Security The Borrower, which is a civil law partnership (Gesellschaft bürgerlichen Rechts) organised under the laws of Germany with its seat in The Netherlands, may become subject to the provisions of German and/or Dutch insolvency law. Under German law a civil law partnership can enter into insolvency in respect of it s assets (Gesellschaftsvermögen) ( 728 German Civil Code) as set out in 17, 18 and 19 of the German Insolvency Code (Insolvenzordnung) if the Borrower is unable to pay its debts as they fall due (zahlungsunfähig) or if the Borrower applied for the opening of insolvency proceedings because it may imminently become unable to pay its debts (drohend zahlungsunfähig) or because it is overindebted (überschuldet). For further information see Certain Matters of German Law. Pursuant to Council Regulation (EC) No. 1346/2000 of 29 May 2000 on Insolvency Procedures (the Regulation), the courts of the Member States within the territory of which the centre of a debtor s main interests is situated shall have jurisdiction to open insolvency proceedings. The Regulation contains a rebuttable presumption that the centre of main interests of a company is the place of its registered office. The courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if the debtor possesses an establishment within that territory, and the effects of those proceedings shall be limited to the assets of the debtor situated in the territory of that Member State only. From a German legal perspective, the Borrower is said to have its seat in the Netherlands. Also, the Borrower has its offices in the Netherlands. On this basis, it is likely that, pursuant to art. 3 of the 51

52 Regulation, the Dutch courts would find that they have jurisdiction to open main insolvency proceedings in respect of the Borrower. The insolvency proceedings available would be either moratorium (surséance van betaling) or bankruptcy (faillissement). Either procedure involves the appointment by the court of an insolvency practitioner. Upon the opening of the proceedings the Borrower would no longer be able to perform legal acts. In the case of moratorium, the Borrower would be represented by management in conjunction with the court appointed administrator, in the case of bankruptcy the liquidator would have exclusive authority to represent the Borrower and act on its behalf. The law applicable to the insolvency proceedings and their effects shall, pursuant to the Regulation, in principle be that of the Member State within the territory of which such proceedings are opened, which would be Dutch insolvency law. Moratorium is designed to enable the insolvent party to restructure and continue its business. It does not apply to claims to the extent they have the benefit of collateral security. Bankruptcy is aimed at liquidating the assets of the insolvent party for the benefit of its creditors, who will receive payment in accordance with their ranking. Secured creditors are entitled to continue to enforce collateral security as if there was no bankruptcy, but subject to specific remedies granted to a liquidator under Dutch insolvency law. Although the Borrower has been established for the purpose of acquiring the Properties and is a limited purpose entity, it may, nonetheless, become insolvent or subject to moratorium proceedings under German or Dutch law. The Issuer, as lender (after the Issue Date) under the Senior Facility Agreement and beneficiary of the security interests granted in respect thereof, will have certain rights under the Senior Facility Agreement if the Borrower becomes insolvent or subject to a moratorium, including certain rights to enforce the Related Security. However, the rights of creditors of insolvent German companies and Dutch companies are limited by law; self-help remedies, for example appointing a receiver in respect of a property and controlling the manner and timing of the sale of secured collateral, are also limited or excluded, as the case may be, by mandatory provisions of German law or, as applicable, Dutch law. According to the German Insolvency Statute, the administrator in insolvency may, in certain circumstances, challenge legal acts which are detrimental to the creditors and were performed prior to the opening of insolvency proceedings. In particular, legal acts performed during the three months before the petition of insolvency run the risk of being challenged. However, the relevant time frame may extend to ten years before filing of the petition insofar as the legal act being challenged was performed with a conscious intent to cause harm and the creditor was aware of this or if collateral was provided for loans replacing equity capital. An important thing to note is, that it follows from article 5 of the Regulation, assets located in Germany and subject to German security interests are not affected by a formal insolvency proceeding opened in the Netherlands. As a consequence, the Borrower Security Trustee would be able to continue to exercise its security rights under collateral security, notwithstanding the insolvency proceedings opened in the Netherlands. Also, any of the rights and remedies available to a Dutch liquidator would not apply in respect of claims secured by collateral security over assets outside the Netherlands. German insolvency law assigns priority to the payment of certain creditors, including the German treasury, secured creditors and post-petition creditors. Pursuant to the German Insolvency Code, rental and lease contracts with respect to immovable property or real estate remain in force despite the insolvency of the borrower/landlord or of the tenant. However, in the event of insolvency proceedings with respect to the Borrower under the Loan, the assignment to the Issuer for security purposes of the receivables under a related lease would for most parts be invalid. Upon the insolvency of a tenant of a Property that secures a German law loan, the insolvency administrator is entitled to terminate rental or lease agreements entered into by such tenant as lessee during the statutory termination notice period, irrespective of any contractual provisions. In Germany, upon the commencement of insolvency proceedings a creditor whose claims are secured by a land charge is entitled to individually enforce the land charge in accordance with the Compulsory Auction and Administration Act (Gesetz über die Zwangsversteigerung und die Zwangsverwaltung) even after the opening of insolvency proceedings. However, if the creditor does not opt for an individual enforcement and does not file for a compulsory administration, the insolvency 52

53 administrator has the right to collect the rents as part of the insolvency estate. In such a situation, the insolvency administrator would collect such rents on behalf of the secured creditor and pass on the proceeds after deduction of a flat fee of 4 per cent. for identification of the receivables and of regularly 5 per cent. for realization of the receivables. In addition, in certain situations, the insolvency administrator will have the ability to temporarily suspend a compulsory sale or compulsory administration of the security for a German law loan. There can be no assurance that if the Borrower were to become insolvent that an insolvency administrator will apply for such suspension. For further information relating to insolvency proceedings under German law see Certain Matters of German Law below. Security over Bank Accounts The Borrower has, in accordance with the terms of the Senior Facility Agreement, established Borrower Accounts into which, among other things, amounts required to be paid under the Senior Facility Agreement must be paid (see further The Loan and the Related Security Description of the Loan and the Related Security and the Structure of the Accounts The Accounts of the Borrower below). The Borrower has, pursuant to the terms of the Borrower Account Pledge Agreements and the Borrower and Master Lessee Account Pledge Agreements pledged all of its interests in the Borrower Accounts to the Finance Parties (including, after the Issue Date, the Issuer). Under the Issuer Deed of Charge and Assignment, the Issuer will grant security over all of the Issuer Accounts (other than the Issuer Share Capital Account), which security will be expressed to be fixed security. Although the Issuer Accounts are stated to be subject to various degrees of control (for example, the Cash Management and Issuer Account Bank Agreement provides that the Cash Manager is to have sole signing rights over the Transaction Account), there is a risk that, if the Cash Manager (on behalf of the Issuer Security Trustee) does not exercise the requisite degree of control over the Issuer Accounts in practice, a court could determine that the security interests granted in respect of those accounts take effect as floating security interests only notwithstanding that the security interests are expressed to be fixed. In such circumstances, monies paid into accounts could be diverted to pay preferential creditors and certain other liabilities were an examiner, a receiver, liquidator or administrator to be appointed in respect of the relevant entity in whose name the account is held. Enforcement Action by Mezzanine Borrower As stated in below in The Loan and the Related Security Description of the Mezzanine Facility and the Intercreditor Arrangements Intercreditor Arrangements Special Rights, in certain circumstances (while certain Loan Defaults and Loan Events of Default under the Senior Facility Agreement are continuing and the Borrower Security Trustee does not take Enforcement Action within certain time periods) the Mezzanine Lender shall have the right to direct the Borrower Security Trustee to take Enforcement Action so as to realise any or all of the Common Security. While the taking of such enforcement action would not effect the priority of payments of any proceeds of such action under the Loan Intercreditor Agreement, it would be likely to have the effect that such proceeds would be used to redeem the Notes in whole or in part. Neither the Servicer nor the Special Servicer will be responsible for any Enforcement Action taken by the Mezzanine Lender (or by the Borrower Security Trustee at the direction of the Mezzanine Lender) and which is likely to impair the use and marketability of any related Property or the value thereof as a security for the Loan, cause a reduction in value of or reduce the recovery on the Loan or which may result in a loss being suffered by the Issuer, the Noteholders and the Mezzanine Lender. Factors Relating to the Notes Insolvency of the Issuer The Issuer is structured to be an insolvency-remote vehicle. Each of the Transaction Documents to which the Issuer is party is subject to limited recourse provisions and non-petition covenants in 53

54 favour of the Issuer. The Issuer has granted security over all of its assets pursuant to the Issuer Deed of Charge and Assignment and the German Security Assignment Agreement. Reliance is therefore placed on the mortgages, pledges, assignments and other fixed security interests granted by the Issuer under all of the Issuer Deed of Charge and Assignment and German Security Assignment Agreement and the insolvency-remote nature of the Issuer for repayment of amounts owing to creditors thereof. Notwithstanding the foregoing, there is always a risk that the Issuer could become subject to insolvency proceedings; the Issuer is insolvency-remote, not insolvency-proof. Certain aspects of Irish insolvency and security law Examiners, Preferred Creditors under Irish law and Floating charges The Issuer has its registered office in Ireland. As a result there is a rebuttable presumption that its centre of main interest, for the purposes of any collective insolvency proceedings under Council Regulation EC No. 1346/2000 (the European Union Insolvency Regulation), is in Ireland and consequently it is likely that any insolvency proceedings applicable to it would be governed by Irish law. An examiner may be appointed to an Irish company in circumstances where it is unable, or likely to be unable, to pay its debts. One of the effects of such an appointment is that during the period of appointment, there is a prohibition on the taking of enforcement action by any creditors of the company. Given that the Issuer is a special purpose entity, the limited recourse nature of the Issuer s liabilities and the structure of the transaction, it is unlikely that an examiner would be appointed to the Issuer. In an insolvency of the Issuer, the claims of certain preferential creditors (including the Irish Revenue Commissioners for certain unpaid taxes) will rank in priority to claims of unsecured creditors and claims of creditors holding floating charges. In addition, the claims of creditors holding fixed charges may rank behind other super preferential creditors (including expenses of any examiner appointed and certain capital gains tax liabilities) and, in the case of fixed charges over book debts, may rank behind claims of the Irish Revenue Commissioners. In certain circumstances, a charge, which purports to be taken as a fixed charge, may take effect as a floating charge. For a charge to be characterised as a fixed charge, the charge holder is required to exercise the requisite level of control over the assets purported to be charged and the proceeds of such assets including any bank account into which such proceeds are paid. If the Issuer becomes subject to an insolvency proceeding and the Issuer has obligations to creditors that are treated under Irish law as creditors that are senior relative to the Noteholders, the Noteholders may suffer losses as a result of their subordinated status during such insolvency proceeding. Interest Payments on the Class D Notes If, on any Payment Date, there are insufficient Available Interest Collections to pay in full interest on the Class D Notes and where such insufficiency arises because of a reduction in the principal balances of the Loan such unpaid interest will not be due and payable on such Payment Date or on any future Payment Date or at any time until the Final Maturity Date of the Notes or, if earlier, the date upon which the Notes are repaid in full. Prepayment and Yield If any Notes of any class are purchased at a premium, and if payments and other collections of principal on the Loan occur at a rate faster than anticipated at the time of the purchase, then the actual yield to maturity on that Class of Notes may be lower than the yield assumed at the time of the purchase. If any Notes of any class are purchased at a discount, and if payments and other collections of principal on the Loan occur at a rate slower than that anticipated at the time of the purchase, then the actual yield to maturity on that Class of Notes may be lower than assumed at the time of the purchase. The investment performance of any Note may vary materially and adversely from expectations due to the rate of payments and other collections of principal on the Loan being faster or slower than anticipated. Accordingly, the actual yield may not be equal to the yield 54

55 anticipated at the time the Note was purchased, and the expected total return on investment may not be realised. For further information about yield, prepayment and maturity see Yield, Prepayment and Maturity Considerations below. Liability under the Notes The Notes and interest thereon will be obligations of the Issuer only and will not be obligations or responsibilities of any person other than the Issuer. In particular, the Notes will not be obligations or responsibilities of, or be guaranteed by Goldman Sachs International or any affiliate of Goldman Sachs International, or of or by the Originator, the Retained Interest Holder, the Note Trustee, the Issuer Security Trustee, the Cash Manager, the Paying Agent, the Issuer Account Bank, the Agent Bank, the Borrower Security Trustee, any Paying Agent or any of their respective affiliates, and none of such persons accepts any liability whatsoever in respect of any failure by the Issuer to make payment of any amount due on the Notes. Principal Losses The ability of the Issuer to repay principal of the Notes is ultimately based upon the Borrower generating Refinancing Proceeds or Disposal Proceeds in respect of the relevant Properties. Certain of the factors which could adversely affect the generation of Refinancing Proceeds or Disposal Proceeds are described above. Limited Recourse The obligations of the Issuer to, among others, the Noteholders are secured to the extent of the Issuer Security and Issuer German Security. On enforcement of the Issuer Security or Issuer German Security, the Issuer Security Trustee, the Note Trustee and the Noteholders will only have recourse to the assets comprised in the Issuer Security or Issuer German Security. In the event that the proceeds of such enforcement are insufficient (after payment of all other claims ranking higher in priority to or pari passu with amounts due under the Notes), then the Issuer s obligation to pay such amounts will cease and the Noteholders will have no further claim against the Issuer in respect of such unpaid amounts, in which event the Issuer s liability to discharge the then unpaid amounts will be extinguished. Enforcement of the Issuer Security or Issuer German Security is the only remedy available for the purpose of recovering amounts owed in respect of the Notes. The Issuer, the Issuer Security Trustee and the Note Trustee will have no recourse to the Originator save in respect of certain representations and warranties given by the Originator in the Loan Sale Agreement. For further information about the representation and warranties, see The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Agreement Representations and Warranties of the Originator at page 130. Rights Available to Holders of Notes of Different Classes In performing its duties as trustee for the Noteholders, the Note Trustee will not be entitled to consider solely the interests of the holders of the Most Senior Class of Notes then outstanding but will need to have regard to the interests of all of the Noteholders. Where, however, there is a conflict between the interests of the holders of one Class of Notes and the holders of another Class of Notes, the Note Trustee will be required to have regard only to the interests of the holders of the Most Senior Class of Notes then outstanding in accordance with, and as more particularly set out in, Condition 3 (Status, Security and Priority). In performing its duties as trustee for the Issuer Secured Creditors, the Issuer Security Trustee will need to have regard to the interests of all of the Noteholders. Where, however, there is a conflict between the interests of the holders of one Class of Notes and the holders of another Class of Notes, the Note Trustee will be required to have regard only to the interests of the holders of the Most Senior Class of Notes then outstanding in accordance with, and as more particularly set out in, Condition 3, and for so long as any Notes are outstanding will not be required to take into account the interests of any other Issuer Secured Creditor, except as otherwise expressly provided in the Issuer Deed of Charge and Assignment. 55

56 Ratings of the Notes The ratings assigned to each Class of Notes by the Rating Agencies are based on the Loan, the Related Security, the Properties, and other relevant structural features of the transaction, including, among other things, the short-term unsecured, unguaranteed and unsubordinated debt ratings of the Liquidity Facility Provider and the long-term unsecured, unguaranteed and unsubordinated debt ratings of the Basis Swap Counterparty, and reflect only the views of the Rating Agencies. The ratings assigned by Moody s address the expected loss in proportion to the initial principal amount of the Class A Notes posed to any holder of the Class A Notes by the Final Maturity Date. The ratings assigned by Fitch and S&P address the likelihood of full and timely receipt by any Noteholder of interest on the Notes and the likelihood of ultimate receipt by any Noteholder of principal on the Notes by the Final Maturity Date in accordance with the terms of the Transaction Documents. There is no assurance that any such ratings will continue for any period of time or that they will not be reviewed, revised, suspended or withdrawn entirely by any of the Rating Agencies as a result of changes in or unavailability of information or if, in the judgment of the Rating Agencies, circumstances so warrant. A qualification, downgrade or withdrawal of any of the ratings mentioned above may impact upon the value and/or the liquidity of the Notes of any class. Agencies other than the Rating Agencies could seek to rate the Notes and if such unsolicited ratings are lower than the comparable ratings assigned to the Notes by the Rating Agencies, those unsolicited ratings could have an adverse effect on the value and/or the liquidity of the Notes of any class. For the avoidance of doubt and unless the context otherwise requires, any references to ratings or rating in this Prospectus are to ratings assigned by the specified Rating Agencies only. Ratings Confirmations Under the Transaction Documents and Condition 12 (Meetings of Noteholders, Modification and Waiver and Substitution), the Note Trustee or the Issuer Security Trustee, as the case may be, is entitled to determine, in its own opinion, for the purposes of exercising any power, trust, authority, duty or discretion under or in relation to the Notes, the Conditions or any of the Transaction Documents, that such exercise will not be materially prejudicial to the interests of the Noteholders or any Class of Noteholders and in making such a determination may take into account, without enquiry among any other things it may, in its absolute discretion, consider necessary and/or appropriate, any confirmation by a Rating Agency, (if available) that the then current ratings of the Notes or, as the case may be, the Notes of such class will not be downgraded, withdrawn or qualified as a result by such exercise. For the avoidance of doubt, such rating confirmation or non-receipt of such rating confirmation shall, however, not be construed to mean that any such action or inaction (or contemplated action or inaction) or such exercise (or contemplated exercise) by the Note Trustee of any right, power, trust, authority, duty or discretion under or in relation to the Note Trust Deed or any of the other Transaction Documents is not materially prejudicial to the interest of holders of that class of Notes. If the Note Trustee or the Issuer Security Trustee, as the case may be, shall certify that any such event, matter or thing is, in its opinion, materially prejudicial, such certificate shall be conclusive and binding upon the Issuer, the Noteholders and the other Issuer Secured Creditors. Similarly, the Rating Agencies will be notified of the exercise of certain discretions by or at the direction of the Servicer, such as amendments to and waivers under the Senior Finance Documents. However, the Rating Agencies are under no obligation to revert to the Note Trustee, the Issuer Security Trustee or the Servicer, as the case may be, regarding the impact of the exercise of such discretion on the ratings of the Notes, and any decision as to whether or not to confirm, downgrade, withdraw or qualify the ratings of all classes or any Class of Notes based on such notification may be made at the sole discretion of the Rating Agencies at any time, including after the exercise of the discretion. The Rating Agencies, in assigning credit ratings, do not comment upon the interests of holders of securities (such as the Notes) and, in any event, there can be no assurance that the Rating Agencies would provide any such confirmation. For further information regarding the basis on which discretions are issued by, or at the discretion of, the Servicer, see The Transaction Documents The Servicing Agreement below. 56

57 Absence of Secondary Market; Limited Liquidity Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List of the Irish Stock Exchange and to trading on its regulated market. There is not, at present, a secondary market for the Notes. There can be no assurance that a secondary market in the Notes will develop or, if it does develop, that it will provide Noteholders with liquidity of investment, or that it will continue for the life of the Notes. In addition, the market value of certain of the Notes may fluctuate with changes in prevailing rates of interest. Consequently, any sale of Notes by Noteholders in any secondary market which may develop may be at a discount to the original purchase price of those Notes. Availability of Liquidity Facility Pursuant to the terms of the Liquidity Facility Agreement, the Liquidity Facility Provider will (prior to the service of a Note Acceleration Notice or the Issuer Security or Issuer German Security otherwise becoming enforceable) provide to the Issuer a committed Liquidity Facility, permitting drawings to be made in the circumstances described in The Transaction Documents The Liquidity Facility Agreement below. The Liquidity Facility will, however, be subject to an initial maximum aggregate principal amount of A82,600,000 which will, in certain specified circumstances, be reduced such that insufficient funds may be available to the Issuer to pay in full interest due on the Notes. This risk will be borne firstly, by the holders of the Class D Notes; secondly by the holders of the Class C Notes; thirdly, by the holders of the Class B Notes; and fourthly, by the holders of the Class A Notes. The maximum aggregate amount of drawings on the Liquidity Facility that may be made to cover interest shortfalls on the Class C Notes and the Class D Notes may not exceed, in aggregate, A10,900,000. The initial Liquidity Facility will expire 364 days after the Issue Date, although it is extendable for successive periods of up to 364 days. The Liquidity Facility Provider is not obliged to extend or renew the Liquidity Facility at its expiry, but if it does not renew or extend the Liquidity Facility on request then the Issuer will, subject to certain terms, be required to make a Stand-by Drawing and place the proceeds of that drawing on deposit in the Standby Account. However, amounts standing to the credit of the Standby Account will not be available to the Issuer or any of the Issuer Secured Creditors (including the Noteholders) at any time after the service of a Note Acceleration Notice. See further The Transaction Documents The Liquidity Facility Agreement below. The Liquidity Facility Provider will be entitled to receive payments of interest and repayments of principal on drawings made under the Liquidity Facility Agreement in priority to payments to be made to Noteholders (which may ultimately reduce the amount available for distribution to Noteholders) both before the service of a Note Acceleration Notice (or the Issuer Security or Issuer German Security otherwise becoming enforceable) and after the service of a Note Acceleration Notice (or the Issuer Security or Issuer German Security otherwise becoming enforceable). The Introduction of International Financial Reporting Standards The Issuer s Irish corporation tax position depends to a significant extent on the accounting treatment applicable to the Issuer. The accounts of the Issuer are required to comply with International Financial Reporting Standards (IFRS)) or with generally accepted accounting principles in Ireland (Irish GAAP) which has been substantially aligned with IFRS. Companies such as the Issuer might, under either IFRS or Irish GAAP, be forced to recognise in their accounts movements in the fair value of assets that could result in profits or losses for accounting purposes which bear little relationship to the company s actual cash position. These movements in value may generally be brought into the charge to tax (if not relieved) as a company s tax liability on such assets broadly follows the accounting treatment. However, the taxable profits of a qualifying company within the meaning of Section 110 of the Taxes Consolidation Act, 1997, as amended, (which it is anticipated that the Issuer will be) will be based on the profits that would have arisen to the company had its accounts been prepared under Irish GAAP as it existed at 31 December This is provided that this profit amount is identified in a note to the audited financial statements of the qualifying company. It is possible to elect out of such treatment and such election, if made, is irrevocable. If the Issuer makes such an election, then taxable profits or losses could arise to the Issuer as a result of 57

58 the application of IFRS or current Irish GAAP that are not contemplated in the cash-flows for the transaction and as such may have a negative effect on the Issuer and its ability to make payments to the Noteholders and Couponholders (if any). The Issuer will covenant in Condition 4.1 (Restrictions) that no such election will be made and that a note of profits as calculated under Irish GAAP as it existed at 31 December 2004 will be included in its audited financial statements. European Union Directive on Taxation of Saving Income Under the European Union Council Directive 2003/48/EU on the taxation of savings income, Member States are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-european Union countries and territories, including Switzerland, have agreed to adopt similar measures (a withholding system in the case of Switzerland). Withholding Tax under the Notes or the Loan In the event any withholding or deduction for or on account of taxes is imposed by law on or is otherwise applicable to payments of interest on or repayments of principal of the Notes to Noteholders, neither the Issuer nor any Paying Agent nor any other entity will be obliged to gross-up or otherwise compensate Noteholders for the lesser amounts the Noteholders would receive as a result of such withholding or deduction. If any such withholding or deduction is imposed in relation to payments of interest on or repayments of principal of the Notes or if any amount payable by the Borrower in relation to the Loan is reduced (because of any withholding or deduction for or on account of taxes or otherwise) or ceases to be receivable (whether or not actually received) by the Issuer, this would in either case entitle the Issuer to redeem the Notes in accordance with Condition 6.3 (Optional Redemption for Tax or Other Reasons) at their then Principal Amount Outstanding plus interest accrued and unpaid thereon, provided the Issuer has sufficient funds available (and subject to certain other conditions). Tax For information about the taxation laws of certain jurisdictions that might impact upon the Issuer s payment obligations under the Notes, see the information set out under the headings Irish Taxation and German Taxation. Change of Law The structure of the issue of the Notes and the ratings that are to be assigned to them are based on English law, Irish law and German law and on administrative practice in each of those jurisdictions in effect as at the date of this Prospectus. No assurance can be given as to the impact of any possible change to English law, Irish law or German law or to administrative practice in any of the foregoing jurisdictions after the date of this Prospectus, nor can any assurance be given as to whether any such change could adversely affect the ability of the Issuer to make payments under the Notes. Changes to the Basel Capital Accord In June 1999, the Basel Committee on Banking Supervision (the Basel Committee) issued proposals for reform of the 1988 Capital Accord and proposed a new capital adequacy framework which would place enhanced emphasis on risk-sensitivity and market discipline. Following an extensive consultation period, the Basel Committee published the International Convergence of Capital Measurement and Capital Standard: A Revised Framework (the New Basel Capital Accord) on 26 June On 14 July 2004, the European Commission published its consultation paper on the EU s implementation of the New Basel Capital Accord (the Capital Requirements Directive). The various approaches under the New Basel Capital Accord and the Capital Requirements Directive will be implemented in stages, some year-end 2006, and the most advanced at year-end The implementation of the New Basel 58

59 Capital Accord or the Capital Requirements Directive, as applicable, could affect the risk-weighting of the Notes in respect of investors which are subject to regulatory capital requirements. Consequently, investors should consult their own advisors as to the consequences to and effect on their implementation of the New Basel Capital Accord or the Capital Requirements Directive, as applicable. The precise effects of potential changes which might result from the implementation by national regulators of the New Basel Capital Accord or the Capital Requirements Directive cannot be predicted. Hedging Risks The Loan bears interest at a rate based on EURIBOR plus a margin and any Mandatory Cost while each Class of the Notes bears interest at a rate based on EURIBOR plus the applicable Relevant Margin. As interest on the Loan and interest on the Notes is likely to be calculated at different times, EURIBOR may fluctuate between these calculations. In order to address the risk of such mismatch of interest rates, the Issuer will enter into the Basis Swap Transaction pursuant to the Basis Swap Agreement. However, there can be no assurance that the Basis Swap Transaction will adequately address all unforeseen hedging risks. Moreover, in certain circumstances the Basis Swap Transaction and/or the Basis Swap Agreement may be terminated and as a result the Issuer may be unhedged if the Issuer is unable to enter into replacement swap transactions. Noteholders may also suffer a loss if the Basis Swap Transaction is terminated and the Issuer is, as a result of such termination, required to pay a termination amount to the Basis Swap Counterparty. Certain amounts payable on an early termination of a Basis Swap Transaction or the Basis Swap Agreement rank senior to any payments to be made to the Noteholders both before service of a Note Acceleration Notice (or the Issuer Security or Issuer German Security otherwise becoming enforceable) and after service of a Note Acceleration Notice (or the German Security Assignment otherwise becoming enforceable). For further information about the Basis Swap Agreement see The Transaction Documents The Liquidity Facility Agreement Basis Swap Agreement below. The Issuer believes that the risks described above are the principal risks inherent in the transaction for the Noteholders, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the Notes may occur for other reasons and the Issuer does not represent that the above statements regarding the risks of holding the Notes are exhaustive. Although the Issuer believes that the various structural elements described in this Prospectus lessen some of these risks for Noteholders, there can be no assurance that these measures will be sufficient to ensure payment to Noteholders of interest, principal or any other amounts on or in connection with the Notes on a timely basis or at all. 59

60 THE LOAN AND THE RELATED SECURITY DESCRIPTION OF THE LOAN AND THE RELATED SECURITY AND THE STRUCTURE OF THE ACCOUNTS Overview The amended and restated senior facility agreement dated 30 June 2006, as further amended by the amendment agreement dated 5 September 2006 (as amended and restated, the Senior Facility Agreement), was entered into by Highstreet B Portfolio GbR (the Borrower), Goldman Sachs International, as arranger (in such capacity, the Loan Arranger), ABN AMRO Trustees Limited, as borrower security trustee for the Finance Parties (the Borrower Security Trustee) and Goldman Sachs Credit Partners L.P., in its separate capacities as facility agent (in such capacity, the Initial Facility Agent) and as lender (in such capacity, the Originator). The Senior Facility Agreement is governed by German law and amends and restates the senior facility agreement dated 27 March 2006 among the parties to the Senior Facility Agreement. Goldman Sachs Credit Partners L.P. is the current facility agent (the Initial Facility Agent) under the Senior Facility Agreement. However, it is expected that prior to the Issue Date, the Initial Facility Agent will resign in accordance with the terms of the Senior Facility Agreement and Capmark Services Ireland Limited will be appointed as facility agent (the Facility Agent). Pursuant to the Senior Facility Agreement, the Originator made available to the Borrower a term loan facility (the Senior Facility) in an aggregate principal amount not to exceed the lesser of (i) A1,206,824,420, (ii) 70 per cent. of the aggregate value of all Properties (as reflected in the Initial Valuation) and (iii) 70 per cent. of the All-in Cost of all the Properties (the Senior Facility Amount). On 3 July 2006, the Borrower drew down a loan in the aggregate amount of A877,596, (the Initial Drawdown). On 31 August 2006, the Borrower drew down a loan in an aggregate amount of A317,966, (the Second Drawdown, and together with the Initial Drawdown, the Loan). The principal amount outstanding of the Loan as at 1 September 2006 was A1,195,562,471. No further amounts may be drawn by the Borrower under the Senior Facility Agreement. Between 1 September 2006 and the Issue Date, the Loan is expected to amortise by the scheduled amortisation amount to A1,192,021,267. The Borrower applied the proceeds of the Loan in or towards financing or refinancing: (a) (b) (c) the costs of acquisition of the Properties (including the costs of acquisition of the leasehold interests in the Ground-Leased Properties); the payment of fees, costs and expenses incurred by the Borrower, the Parent and the Equity Holders in connection with the transactions contemplated by the Senior Facility Agreement (including, without limitation, financing fees, professional fees, legal costs, hedging costs, real estate transfer taxes and registration fees); and funding capital expenditures of the Borrower required under the Master Lease. For the purposes of this section any reference to a Lender shall be a reference to the Originator and any person who becomes a Lender in accordance with the Senior Facility Agreement which, in each case, has not ceased being a party to the Senior Facility Agreement in accordance with the terms thereof and, following the transfer of the Loan to the Issuer pursuant to the Loan Sale Agreement, includes the Issuer. A summary of the principal terms of the Senior Facility Agreement is set out below. Principal Definitions For the purposes of this Prospectus: Account Bank means the bank appointed in accordance with the Senior Facility Agreement. Accounting Report means the tax and accounting due diligence report prepared by accounting advisors and dated on or about 27 March

61 Acquisition Documentation means one or more agreements dated on or about 27 March 2006, as amended on or about 29 June 2006, providing for the acquisition of the Properties by the Borrower from KarstadtQuelle AG (and/or affiliates thereof). All-in Cost of any Property means the actual purchase price for such Property as set forth in the Acquisition Documentation, plus the Transaction Expenses allocated to such Property on a pro rata basis, based on the related purchase price. Allocated Loan Amount of a Property at any time means the amount specified as the Allocated Loan Amount for such Property in the Senior Facility Agreement. Allocated Mezzanine Interest at any time means the interest accruing on the Mezzanine Loan for a given period, multiplied by a fraction, the numerator of which is the sum of the Mezzanine Allocated Loan Amounts for those Properties then securing the Mezzanine Loan, and the denominator of which is the sum of the Mezzanine Allocated Loan Amounts for all Properties and Portfolio A Properties then securing the Mezzanine Loan. Applicable Accounting Principles means generally accepted accounting principles, standards and practices in the Federal Republic of Germany (German GAAP) or, if the Borrower shall so elect by notifying the Facility Agent in writing in connection with the delivery of financial statements, accounting principles adopted by the International Financial Reporting Standards Board and its successor (IFRS) as in effect on the date of such notice; provided that any such election once made shall be irrevocable. Asset Management Services Agreement means any agreement with a Managing Agent relating to the management of the Properties reasonably satisfactory to the Facility Agent. B Portfolio Deferred Capex Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. B Portfolio Maintenance Capex Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. B Portfolio Rent Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. Break Costs means the amount (if any) by which: (a) the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Loan Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Loan Interest Period and had the margin been zero for such period; exceeds: (b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the European interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Loan Interest Period. Business Day means any day other than (i) a Saturday and a Sunday and (ii) a day on which banks are not open for interbank business in London, Amsterdam or Frankfurt. Cash Collateral Account means an account subject to the Facility Agent s exclusive control in which the Borrower will have the option to deposit cash collateral pursuant to the Senior Facility Agreement. Cash Trap Period means a period (i) commencing on any Loan Payment Date as of which ICR is less than 150 per cent., and (ii) terminating on the next following Loan Payment Date as of which ICR is 150 per cent. or greater. 61

62 Change of Control means that Whitehall 2005, affiliates of The Goldman Sachs Group, Inc. and/or entities enforcing the security for the Mezzanine Loan (i) shall cease to own, directly or indirectly, at least 51 per cent. of the outstanding Shares in each of the Borrower, the Master Lessee and the Parent, or (ii) shall cease to control the Borrower, the Master Lessee and the Parent. Commitment means: (a) in relation to an original Lender, the amount set in the Senior Facility Agreement and the amount of any other Commitment transferred to it under the Senior Facility Agreement; and (b) in relation to any other Lender, the amount of any Commitment transferred to it under the Senior Facility Agreement, to the extent not cancelled, increased, reduced or transferred by it under the Senior Facility Agreement. Control Account means each of the B Portfolio Rent Account, the Rent Account, the Sales Account, the Junior Reserve Account, the Cash Collateral Account, the B Portfolio Maintenance Capex Account, the General Account and the B Portfolio Deferred Capex Account. Counterparty means each counterparty under a Hedge Document; provided that such counterparty is Goldman Sachs International or a financial institution reasonably acceptable to Goldman Sachs International with a short term credit rating of at least A-1 from S&P, F1 from Fitch and P1 from Moody s. Disposal means (i) the sale, transfer or other disposition of all or any part of, or interest in, any Property or other asset, whether voluntary or involuntary (including without limitation any transfer of a Property or Properties to Highstreet A Portfolio GbR), or (ii) damage or destruction to any Property, or the expropriation of any Property or any portion thereof or interest therein. Disposal Proceeds means all sums paid or any other consideration given in money or money s worth for the Disposal of the Borrower s interest in all or part of any Property including (without limitation): (a) all such sums and other consideration; (b) all compensation and damages received for any use or expropriation in respect of a Property; and (c) all insurance proceeds in respect of the associated Disposal. Dritte Leases means direct leases between the Borrower and unaffiliated third parties (excluding for the avoidance of doubt any leases relating to Properties subject to the Master Lease and the Permitted Subleases, as to which any income received from the lessor will be forwarded to the Major Subtenants), in respect of certain Properties identified in the Senior Facility Agreement. Dutch Banking Act means the Dutch 1992 Act on the Supervision of the Credit System (Wet toezicht kredietwezen 1992) as amended from time to time. Dutch Exemption Regulation means the Exemption Regulation of the Dutch Minister of Finance dated 26 June 2002 (Vrijstellingsregeling Wtk 1992) as amended from time to time. Encumbrance and Restriction means any limited rights, perpetual clauses, easements, qualitative obligations, personal rights of enjoyment, beneficial ownership rights, whether or not embodied in certificates or depository receipts, rights to exercise (ancillary) rights, rights of collection, rights to acquire, rights to acquire one or more of the foregoing encumbrances and restrictions, attachments, and any other restrictions of the freedom to control, manage, enjoy, exercise or collect, the foregoing with the exception of restrictions which arise directly from the law. Environmental Report means the structural and environmental reports for the Properties prepared by a structural and environmental consultant and delivered to the Facility Agent in accordance with the Senior Facility Agreement. Equity Holders means each of KQ KG and WH SPV. EURIBOR means for any Loan Interest Period: (a) the applicable Screen Rate; or 62

63 (b) if no Screen Rate is available for a Loan Interest Period, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request quoted by the Reference Banks to leading banks in the European interbank market, as of 11:00 a.m., Brussels time, on the Quotation Day for the offering of deposits in euro for a period comparable to the Loan Interest Period of the Loan. Facilities Management Services Agreement means an agreement with Karstadt Warenhaus GmbH, in form and substance reasonably satisfactory to the Facility Agent. Fee Letter means each letter dated on or about 27 March 2006 between the Loan Arranger, the Facility Agent, the original Borrower Security Trustee, the Original Lenders, Whitehall Street Global Real Estate Limited Partnership 2005, Whitehall Street International Real Estate Limited Partnership 2005 and KarstadtQuelle AG relating to fees, as any such letter may be amended from time to time. Finance Party means each of the Facility Agent, the Loan Arranger, the Borrower Security Trustee and the Lenders. Financial Indebtedness means any indebtedness for or in respect of: (a) moneys borrowed; (b) any amount raised by acceptance under any acceptance credit facility; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with generally accepted accounting principles applicable to Borrower, be treated as a finance or capital lease; (e) receivables sold or discounted (other than any receivables to the extent they are sold on a nonrecourse basis); (f) any amount raised under any forward sale or purchase agreement, any sale leaseback transaction, or any other transaction primarily intended to have substantially the equivalent commercial effect as a borrowing; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price including without limitation foreign currency exchange agreements, commodity price protection agreements and other interest or currency rate or commodity price hedging agreements (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account); (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and (i) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above. First Utilisation Date means the date on which the first utilisation of the Senior Facility occurred, which was 3 July General Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. Gross Revenue means all revenues and receipts of every kind derived from owning and operating the Properties and all departments and parts thereof; provided, however, that Gross Revenues shall not include the following: (a) proceeds from the sales of any Properties, assets, equipment or movable goods in accordance with the Senior Facility Agreement; or (b) insurance proceeds (other than proceeds from business interruption or loss of income). Ground Lease means each of the agreements in respect of those Properties that are subject to ground leases as identified in the Senior Facility Agreement. 63

64 Ground-Leased Properties means those Properties identified as such in the Senior Facility Agreement. Hedge Document means any document evidencing or relating to any interest or currency swap, cap, floor, collar or option transaction or any other treasury transaction or any combination of the same or any other transaction entered into in connection with protection against or benefit from fluctuation in interest rates entered into in connection with the interest to be paid under the Senior Facility Agreement (collectively, Hedge Documents). ICR means, as of each Loan Payment Date, the quotient (expressed as a percentage) obtained by dividing (a) the aggregate Net Rental Income for the period of four consecutive quarters commencing on the Initial Quarter Date associated with such Loan Payment Date, by (b) the aggregate Projected Forward Interest for such period of four consecutive quarters. Initial Quarter Date associated with any Loan Payment Date means the first day of the fiscal quarter that includes such Loan Payment Date. Initial Valuation means the valuation of the Properties prepared by Cushman & Wakefield dated 3 July 2006 and delivered to the Facility Agent in accordance with the Senior Facility Agreement. Insurance Policy means any policy of insurance or assurance relating to one or more Properties which is entered into in accordance with the obligations described in paragraphs (k) to (v) of Property Undertakings below. Junior Reserve Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. JV Holding BV means W2005 Six BV, a private company with limited liability incorporated under the laws of The Netherlands. KQ KG means Karstadt Immobilien GmbH & Co. Objekt Bochholt KG, to be renamed KQ Joint Venture GmbH & Co. KG, a limited partnership established in accordance with the laws of the Federal Republic of Germany. Lease means any present or future lease (Miet- oder Pachtvertrag), sub-lease (Untermiet- oder Pachtvertrag) or other contractual right to occupy (Besitzrecht) in respect of all or any part of a Property, and any agreement for the grant of any of the foregoing. Legal Due Diligence Report means the legal due diligence report prepared by legal counsel to WH SPV delivered to the Facility Agent in accordance with the Senior Facility Agreement. Loan Default means a Loan Event of Default or any event or circumstance described below under Loan Events of Default which would (with the expiry of a grace period, the giving of notice, the making of any determination (save for any determination as to materiality in connection with any such event or circumstance) under the Senior Facility Agreement or any combination of any of the foregoing) be a Loan Event of Default. Loan Event of Default means any event or circumstance described below under Loan Events of Default. Loan Final Maturity Date means the Loan Payment Date immediately following the fifth anniversary of the First Utilisation Date or, if such date is not a Business Day, the immediately preceding Business Day. Loan Interest Period means, in relation to the Loan and each Unpaid Sum, each period determined in accordance with the Senior Facility Agreement. Loan Level Eligible Investments means (a) euro demand or time deposits, certificates of deposit and short-term debt obligations (including commercial paper); provided that in all cases such investments will mature at least one business day prior to the Loan Payment Date due in April 2007 in an amount at least equal to the principal invested and the short-term unsecured, unguaranteed and unsubordinated debt obligations of the issuing or guaranteeing entity or the entity with which the demand or time deposits are made (being a bank or licensed EU credit institution) are rated A-1+ by S&P, P-1 by Moody s and F1+ by Fitch; and (b) any euro denominated money market fund rated at least AAA by S&P, Aaa by Moody s and AAA by Fitch. 64

65 Loan Payment Date means: (a) in relation to the Loan, each 20 January, 20 April, 20 July or 20 October, provided, that if any such date is not a Business Day, then such Loan Payment Date shall be the first Business Day following such date; and provided, further, that the first Loan Payment Date shall occur on 20 October 2006; and (b) in relation to any Unpaid Sum, the last day of a Loan Interest Period relevant to that Unpaid Sum. LTV as of any date means the quotient (expressed as a percentage) of (i) the aggregate principal amount of the Loan then outstanding less the aggregate amount then on deposit in the Sales Account and the Cash Collateral Account, if any, divided by (ii) the sum of the then most recent aggregate Market Value of all of the Properties then securing the Loan. Major Casualty means expropriation, damage or destruction to a Property, as to which the expropriation proceeds or restoration cost (as estimated by an independent expert reasonably acceptable to Agent) exceeds 50 per cent. of the Market Value of such Property as set forth in the Initial Valuation. Majority Lenders at any time means: (a) if there is no Loan then outstanding, a Lender or Lenders whose Commitments aggregate at least 66 2 / 3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated at least 66 2 / 3 per cent. of the Total Commitments immediately prior to the reduction); or (b) at any other time, a Lender or Lenders whose participations in the Loan then outstanding aggregate at least 66 2 / 3 per cent. of the Loan then outstanding. Managing Agent means Archon Group Deutschland GmbH, Karstadt Warenhaus GmbH, Whitehall Management Services B.V. or another managing agent approved by the Facility Agent, such approval not to be unreasonably withheld in the absence of a Loan Event of Default; provided that if a Loan Event of Default is continuing, the Facility Agent will have the exclusive right to replace and designate each Managing Agent. Mandatory Costs means the percentage rate per annum calculated by the Facility Agent as mandatory costs in accordance with the Senior Facility Agreement. Market Value means, in relation to any Property at any time, the then most recent Valuation of Borrower s interest in that Property. The Market Value of any Property which has been subject to casualty or destruction and is not substantially restored as of the date of the associated Valuation shall be the market value of such Property in its actual condition on the date of such Valuation, plus the amount of associated insurance proceeds available or reasonably anticipated to be recoverable for restoration of such Property then on deposit in the Sales Account.* Material Adverse Effect means any event or circumstance, which, in the Facility Agent s reasonable judgment, is materially adverse to: (a) the ability of the Borrower to perform and comply with its material obligations under the Senior Finance Documents; or (b) subject to the Reservations, the validity or enforceability of any of the Senior Finance Documents, except that, in relation to a Senior Finance Document other than a Senior Security Document, a Material Adverse Effect will only arise to the extent that the invalidity or enforceability of any of such Senior Finance Documents would in the Facility Agent s reasonable judgment materially and adversely affect the interests of the Lenders. Material Sublease means (1) sublease by a Major Sub-Tenant which, pursuant to the provisions of a Permitted Sublease, requires the consent of Master Lessee, and (2) any sublease by Master Lessee other than a Permitted Sublease. * The Initial Valuation was conducted by the Valuer on the basis of market value as that term is defined in the then current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors rather than in accordance with this definition. 65

66 Mezzanine Release Amount means, pursuant to the Mezzanine Facility Agreement, in relation to the disposal of the whole of a Property at any time, the allocated loan amount (as stipulated in the Mezzanine Facility Agreement) of such Property at such time, multiplied by the Release Percentage (as defined in the Mezzanine Facility Agreement) for that Property. Net Disposal Proceeds means, upon the disposal of any interest in a Property, the Disposal Proceeds received by Borrower from such disposal after deducting: (a) all reasonable costs and expenses incurred by Borrower in connection with such disposal; and (b) all Taxes incurred or to be incurred in connection with such disposal other than income taxes. Net Rental Income for any period means all sums payable to or for the benefit of the Borrower during such period arising from the letting, use or occupation of all or any part of any Property, after deducting costs from or connected with property management, any unpaid ground rent (Erbpachtzinsen), any service charge payments, any insurance premium payable in respect of the Properties, any deposits to the B Portfolio Maintenance Capex Account, and any VAT payable in respect of any of the foregoing (and adding any VAT recovered in respect of each of the foregoing), in each case to the extent such deducted amounts are payable either by the Borrower or by the Master Lessee (but not by any subtenant). Parent means Highstreet Holding GbR, a German civil law partnership of the Equity Holders. Permitted Encumbrance means (i) certain encumbrances disclosed in the Senior Facility Agreement, (ii) the Master Lease, (iii) the Permitted Subleases, and (iv) other subleases of the Properties entered into in conformity with the provisions of the Senior Facility Agreement. Permitted Subleases means the two subleases between Master Lessee (as sublessor) and each of the Major Subtenants (as sublessees), respectively, covering space in the Properties, dated 27 March 2006, as amended on or about 29 June Professional Market Party means a professional market party (professionele marktpartij) within the meaning of the Dutch Exemption Regulation. Projected Forward Interest computed as at any Loan Payment Date means (1) amount of interest expected to accrue under the Senior Facility during the period of four fiscal quarters that commenced on the associated Initial Quarter Date (as reasonably estimated by the Borrower), assuming (i) if the interest rate hereunder has been hedged through a cap, the lesser of the applicable interest rate determined from the forward interest curve and the capped rate, and (ii) if the interest rate hereunder has been swapped, the swapped interest rate, less (2) the interest expected to be received during such period (as reasonably estimated by Borrower) on amounts then on deposit in the Control Accounts. Property means each property listed in Appendix 3 to this Prospectus, together with those Properties for which the sale and purchase is completed after the date of this Prospectus in accordance with the terms of the Senior Facility Agreement, and, where the content so requires, includes the buildings on that Property; provided, however, that Property shall not include (a) the parcel located in Delmenhorst, Lange Strasse 96-97, registered with the land registry of Delmenhorst, folio (Band) 576, page 20937, plot 1 (373/4), and (b) the portion of the parcel in Gütersloh, Berliner Strasse 21, registered with the land registry of Gütersloh page 36282, plot 82 (433) subject to a preemptive acquisition right in favour of the City of Gütersloh. Quarterly Capex Instalment to be paid to the B Portfolio Maintenance Capex Account prior to each Loan Payment Date means an amount equal to the sum of the amounts identified as such in the Senior Facility Agreement (which payment may be made in one or more instalments, in each case prior to such Loan Payment Date); provided, that if following the earlier of (i) full and final repayment pursuant to the Senior Facility Agreement of all amounts held in the Cash Collateral Account and (ii) the Loan Payment Date falling in April 2007 fewer than all of the Properties secure the Loan (whether as a result of Disposals or otherwise), then the Quarterly Capex Instalment shall be reduced on each Loan Payment Date thereafter by the sum of the amounts identified as such in the Senior Facility Agreement for all Properties that do not secure the Loan as of such Loan Payment Date. Quarterly Capex Instalment Amount means the amount of capital expenditures allocated per Property as indicated in the Senior Facility Agreement. 66

67 Quotation Day means, in relation to any period for which an interest rate is to be determined, two TARGET Days before the first day of that period; unless market practice differs in the European interbank market in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the European interbank market (and if quotations would normally be given by leading bank in the European interbank market on more than one day, the Quotation Day will be the last of those days). Reference Banks means the principal Brussels offices of the Barclays Bank PLC, HSBC Bank plc, Lehman Brothers and Merrill Lynch or such other banks as may be appointed by the Facility Agent in consultation with the Borrower. Release Amount means, in relation to the disposal of the whole of a Property at any time, the Allocated Loan Amount of such Property at such time, multiplied by the Release Percentage for that Property specified in the Senior Facility Agreement. Release Amount Differential means, with respect to any Disposal of a Property for which the full Release Amount is prepaid in accordance with the provisions described in paragraphs (i) or (j) of General Undertakings below, an amount equal to (i) the Release Amount for such Property, less (ii) the Allocated Loan Amount for such Property at the time of such Disposal. Release Percentage for any Property means the percentage indicated for such Property in the Senior Facility Agreement. Rent Account means the account maintained with the Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. Reports means the Initial Valuation, the Legal Due Diligence Report, the Environmental Report and the Accounting Report. Repeating Representations means the representations and warranties set out in paragraphs (a), (b), (c), (d), (e), (u), (v), (aa), (bb), (hh) and (kk) (but only the first sentence thereof) of Representations and Warranties below. Reservations means the reservations, qualifications and observations set out in any legal opinion delivered pursuant to the conditions to utilisation provisions of the Senior Facility Agreement. Restricted Circle (besloten kring) has the meaning given to it under the Dutch Exemption Regulation. Sales Account means the account maintained with an Account Bank and designated as such in accordance with the Senior Facility Agreement, and includes any replacement account, and any subdivision or sub-account of the foregoing. Screen Rate means percentage rate per annum determined by the Banking Federation of the European Union for the relevant period displayed on Telerate Page 248. If the agreed page is replaced or service ceases to be available, the Facility Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders. Senior Finance Document means each of: (a) the Senior Facility Agreement; (b) each Senior Security Document; (c) each Hedge Document; (d) each Transfer Certificate; (e) the Fee Letter; (f) each utilisation request; and (g) any document designated as such by the Facility Agent and the Borrower. Senior Security Document means each of: (a) pledge agreement among the Lenders, the Borrower Security Trustee, the Parent and JV Holding BV, creating a first-ranking pledge over all partnership interests in the Borrower (the Borrower Pledge Agreement); 67

68 (b) (c) (d) (e) (f) pledge agreement among the Borrower Security Trustee, JV Holding BV, KQ KG and WH SPV, creating a first-ranking pledge over all Shares in JV Holding BV (the JV Holding Pledge Agreement); pledge agreement among the Borrower Security Trustee, the Master Lessee, KQ KG and WH SPV, creating a first-ranking pledge over all Shares in the Master Lessee (the Master Lessee Pledge Agreement); one or more account pledge agreements among the Borrower Security Trustee, the Lenders and the Borrower relating to the General Account, the Rent Account, the Sales Account, the Junior Reserve Account and the Cash Collateral Account creating a valid and perfected first-ranking security interest over such accounts (each a Borrower Account Pledge Agreement and collectively the Borrower Account Pledge Agreements); one or more account pledge agreements among (i) the Borrower Security Trustee, the Lenders and the Borrower or the Master Lessee relating to the B Portfolio Deferred Capex Account and the B Portfolio Maintenance Capex Account, and (ii) the Borrower Security Trustee, the Lender and the Master Lessee relating to the B Portfolio Rent Account, in each case creating a firstranking valid and perfected pledge over each such account (each a Borrower and Master Lessee Account Pledge Agreement and collectively the Borrower and Master Lessee Account Pledge Agreements and together with the Borrower Pledge Agreement, the JV Holding Pledge Agreement, the Master Lessee Pledge Agreement and the Borrower Account Pledge Agreements, the Pledge Agreements); first-ranking uncertificated land charges over the Properties granted to the Borrower Security Trustee in an amount of 150 per cent. of the relevant Allocated Loan Amount, accruing interest at a rate of 18 per cent. p.a., and plus an ancillary amount (Nebenleistung) of 15 per cent. of the land charge s nominal amount, being immediately enforceable (sofort vollstreckbar) in the full nominal amount of the applicable land charge plus interest and ancillary amounts, provided, however, that (i) the land charge amount is, if the relevant Property is located in a redevelopment area (Sanierungsgebiet), equal to the purchase price for such Property under the Acquisition Documentation, (ii) the land charge amount is, if the relevant Property is solely comprising hereditary building rights, equal to 80 per cent. of the purchase price for such Property under the Acquisition Documentation, and (iii), if the relevant Property is comprising owned parcels of land as well as hereditary building rights (a mixed Property), the amount of the respective land charge over the owned parcels of land is equal to 150 per cent. of the relevant Allocated Loan Amount for such Property, and the amount of the (additional) land charge(s) over the hereditary building right(s) concerned is equal to 80 per cent. of the individual fair market value of each such hereditary building right. The limitations set out in (ii) and (iii) above do not apply if (i) the grant of land charges over the hereditary building rights in question is not subject to the respective land owner s consent, or (ii) the parcels of land to which the hereditary building rights comprising the Property in question pertain also belong to the seller under the Acquisition Documentation (in which case (1) the hereditary building rights in question must either have been deleted upon funding or (2) land charges have to be granted over both, the hereditary building rights and the underlying parcels of land). The limitations also do not apply to the Property located in Offenburg, Lindenplatz 3* (a mixed Property), where (in addition to any further land charges to be granted pursuant to the general rules set forth above over the owned parcels of land comprising such Property) existing land charges in the nominal amounts of DEM9,900,000 (A5,061,789.62) and DEM100,000 (A51,129.18) shall be assigned to the Borrower Security Trustee in full, and with respect to which the submittal to their immediate enforcement in the full nominal amount of each such land charge shall be recorded separately. In the case of the Property located in Kiel, Holstenstrasse 1-11, the land charge amount shall be (together with the land charge to be granted for the benefit of the Mezzanine Finance Parties) A17,250,000 plus interest and the ancillary amount. The foregoing are collectively referred to as the Land Charges; * Sale of this Property not yet completed. Property is currently cash collateralised. 68

69 (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) security purpose agreement among the Borrower Security Trustee, also acting as Borrower Security Trustee under the Mezzanine Facility Agreement, the Borrower, the Parent and their respective partners relating to the Properties and the Land Charges (the Security Purpose Agreement); notarial confirmations (notarielle Rangbestätigungen) (the Notarial Confirmations); evidence reasonably satisfactory to the Facility Agent that property insurance meeting the requirements of the Senior Facility Agreement (including irrevocable naming the Borrower Security Trustee as co-insured and/or as the first loss payee or a certificate of third party interest (Sicherungsschein (in respect of fire insurance and other types of insurance customarily covered by such type of instrument), Sicherungsbestätigung or Sicherungsvereinbarung)) has been obtained for the Properties and is in full force and effect (the Insurance); the lease guarantee provided by KarstadtQuelle AG of the obligations of the subtenants under the Permitted Subleases (the Parent Lease Guarantee); one or more declaration/s of assignment relating to the assignment to the Borrower Security Trustee in full, of each of the existing land charges in the nominal amounts of DEM9,900,000 (A5,061,789.62) and DEM100,000 (A51,129.18) over the Property located in Offenburg, Lindenplatz 3*, as well as an enforceable counterpart (vollstreckbare Ausfertigung) of the submittal to the immediate enforcement (Unterwerfung unter die sofortige Zwangsvollstreckung) in the full nominal amount of each such land charge (the Existing Land Charge Assignments); a security assignment agreement between the Borrower Security Trustee, also acting as borrower security trustee under the Mezzanine Facility Agreement, and the Borrower creating a valid and perfected security interest with respect to Borrower s rights under the Master Lease with respect to the Properties, under easements (Dienstbarkeiten) and rights of use (Nießbräuche) granted to the sublessees pursuant to or in connection with the Permitted Subleases, under the Dritte Leases and any hereditary building rights granted with respect to the Properties (the Assignment of Leases); a security assignment agreement between the Borrower Security Trustee, also acting as borrower security trustee under the Mezzanine Facility Agreement, and the Master Lessee creating a valid and perfected security interest with respect to Master Lessee s right under the Permitted Subleases to the extent such Permitted Subleases pertain to the Properties (the Master Lessee Assignment of Permitted Subleases); a security assignment agreement between the Borrower Security Trustee, also acting as borrower security trustee under the Mezzanine Facility Agreement, and the Borrower creating a valid and perfected security interest with respect to Borrower s rights under the Acquisition Documentation and all future sales proceeds generated by Disposals of the Properties (the Assignment of Acquisition Documentation); a security assignment agreement between the Borrower Security Trustee, also acting as borrower security trustee under the Mezzanine Facility Agreement, and the Borrower creating a valid and perfected security interest with respect to Borrower s rights as beneficiary under insurance contracts required under the Senior Facility Agreement with respect to the Properties (other than any insurance required under the Senior Facility Agreement against product and third party and public liability risks) (the Assignment of Insurance); a security assignment agreement between the Borrower Security Trustee and the Master Lessee creating a valid and perfected security interest with respect to the Master Lessee s rights under any applicable Asset Management Services Agreement and/or Facilities Management Services Agreement (the Master Lessee Assignment of Services Agreements); a security assignment agreement between the Borrower Security Trustee and the Borrower creating a valid and perfected security interest with respect to the Borrower s rights under any applicable Asset Management Services Agreement and/or Facilities Management Services Agreement (the Borrower Assignment of Services Agreements); and * Sale of this Property not yet completed. Property is currently cash collateralised. 69

70 (r) a deed of assignment between the Borrower Security Trustee and the Borrower creating a valid and perfected security interest with respect to Borrower s rights under the Hedge Documents (the Assignment of Hedge Documents, and together with the Existing Land Charge Assignments, the Assignment of Leases, the Master Lessee Assignment of Permitted Subleases, the Assignment of Acquisition Documentation, the Assignment of Insurance, the Master Lessee Assignment of Services Agreements and the Borrower Assignment of Services Agreements, the Assignment Agreements). Share means any partnership interest, stock, share or other equity interest of any kind (and any options or securities exercisable for, or convertible or exchangeable into, any of the foregoing). Single Purpose Entity means a person (other than an individual, a government, or any agency or political subdivision of any government): (a) the business of which is limited to the owning, management, maintenance, sale and lease of the Properties; (b) which does not have any Financial Indebtedness other than as permitted under the Senior Facility Agreement; (c) which complies with the requirements of the relevant laws in relation to the management of corporate entities in its jurisdiction of incorporation; (d) which owns no assets other than the Properties (and any assets, rights or obligations in relation to the Properties), has no Subsidiaries and holds no Shares in any other person; and (e) which conducts business in its own name, has its own separate books, records and accounts, and observes the partnership or corporate formalities required under applicable law. Tax means any tax, levy, impost, excise duty or other charge or withholding of a similar nature (including, but not limited to, the solidarity surcharge imposed by the German (Solidaritätszuschlaggesetz) and any surcharge, penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) imposed, collected or assessed by, or payable to, a Tax Authority. Tax Authority means any government, state or municipality or any local, state, federal or other fiscal, revenue, customs or excise authority, body or official anywhere in the world including, without limitation, the German, Dutch and Irish tax authorities. Termination Major Casualty means a Major Casualty affecting a Property as to which Borrower does not either (i) Dispose of such Property during the 180-day period following such Major Casualty, with the result that, within such 180-day period, the Borrower prepays the Loan in the amount of the applicable Release Amount and pays all such other amounts as are required under the Senior Facility Agreement in connection with such prepayment (such prepayment and all such other amounts, the Disposal Amount), or (ii) deliver to Agent on behalf of the Lenders during such 180-day period a clean, irrevocable standby letter of credit from a bank reasonably acceptable to Agent in an amount equal to the Disposal Amount, entitling the Facility Agent on behalf of the Lenders unconditionally to draw thereon on and after the 180th day after such damage or destruction (and, upon Agent drawing thereon, the applicable Release Amount and such other associated payments will be deemed to have been made to the Facility Agent on behalf of the Lenders). Test Date means: (a) each utilisation date under the Senior Facility; (b) each date on which the Facility Agent is requested to release amounts deposited in the Cash Collateral Account to acquire a Property; and (c) each Loan Payment Date. Total Commitments means the aggregate for the time being of the Commitments of all the Lenders. Transaction Expenses means all costs of the acquisition of the Properties contemplated by the Acquisition Documentation, excluding (i) deferred maintenance, (ii) capital expenditures, (iii) financing fees and (iv) sponsor fees (if any). 70

71 Transfer Certificate means a transfer certificate substantially in the form set out in the Senior Facility Agreement or any other form agreed between the Facility Agent and the Borrower. Unpaid Sum means any sum due and payable but unpaid by the Borrower under the Senior Finance Documents. Valuation means a valuation substantially in the form of the Initial Valuation, or in form and substance satisfactory to the Facility Agent, in either case prepared and issued by the Valuer and addressed to the Finance Parties, valuing Borrower s interests in each Property, carried out on a market value basis; provided, that so long as an Event of Default is not continuing, such Valuation (other than the Initial Valuation) shall consist solely of an update of the immediately preceding Valuation delivered to the Finance Parties pursuant to the provisions of the Senior Facility Agreement. Valuer means as of the date any Valuation is requested or required pursuant to the Senior Facility Agreement, (i) if a Loan Event of Default is not then continuing, Cushman & Wakefield (unless the Facility Agent reasonably determines that such firm either is no longer independent or is otherwise not an appropriate firm, in which case a substitute Valuer will be selected by the Borrower subject to the Facility Agent s reasonable approval), and (ii) if a Loan Event of Default is then continuing, a Valuer selected by the Facility Agent. VATA means the Value Added Tax Act 1999 (Umsatzsteuergesetz). VAT Adjustment means any adjustment that is or may be required under sec. 15a of the VATA to be made to the input tax incurred by Borrower in respect of a Property. VAT Group means a fiscal unit (Organschaft) for VAT purposes according to sec. 2 (2) of the VATA. WH SPV means W2005/Thirty-Three BV, a private company with limited liability incorporated in The Netherlands. Whitehall 2005 means (i) Whitehall Street Global Real Estate Limited Partnership 2005, (ii) Whitehall Street International Real Estate Limited Partnership 2005, (iii) Whitehall Street Global Employee Fund 2005, LP, (iv) Whitehall Street International Employee Fund 2005 (Delaware), LP, and/or (v) any partnership or entity Wholly-Owned by one or more of the foregoing. Wholly-Owned means direct or indirect ownership by one person or by a group of specified persons of all of the equity and voting interests in another person (including without limitation ownership of all rights to acquire equity or voting interests in such other entity). Conditions precedent The obligations of each Finance Party to the Borrower under the Senior Facility Documents were subject to the Facility Agent first having received certain documents and other evidence as conditions precedent in form and substance satisfactory to it. These documents included, among other things, constitutional documents and resolutions of the appropriate corporate bodies for the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV, delivery of the Legal Due Diligence Report and a reliance letter in form and substance reasonably satisfactory to the Facility Agent, delivery of the Initial Valuation and a reliance letter in form and substance reasonably satisfactory to the Facility Agent, delivery of evidence of appropriate insurance cover and delivery of copies of each of the Master Lease, each Permitted Sublease and the Parent Lease Guarantee. Majority Lenders Unless a contrary indication appears in a Senior Finance Document, the Facility Agent and the Borrower Security Trustee will: (a) exercise any right, power, authority or discretion vested in them as Facility Agent or Borrower Security Trustee in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent or Borrower Security Trustee); and (b) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders. 71

72 Unless a contrary indication appears in a Senior Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties. The Facility Agent and the Borrower Security Trustee may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until they have received such security as they may require for any cost, loss or liability (together with any associated VAT) which they may incur in complying with the instructions. In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Facility Agent and the Borrower Security Trustee may act (or refrain from taking action) as they consider to be in the best interest of the Lenders. The Facility Agent and the Borrower Security Trustee are not authorised to act on behalf of a Lender (without first obtaining that Lender s consent) in any legal or arbitration proceedings relating to any Senior Finance Document. Interest Calculation of Interest Pursuant to the Senior Facility Agreement, the Borrower must pay accrued interest on the Loan on each Loan Payment Date in respect of the immediately preceding Loan Interest Period. The rate of interest payable on the Loan for each Loan Interest Period is calculated as the percentage rate per annum which is the aggregate of a margin plus EURIBOR and plus Mandatory Costs (if any). Interest on overdue amounts If the Borrower fails to pay any amount (other than interest) payable by it under a Senior Finance Document on its due date (excluding any grace period as described below under paragraph (a) of Loan Events of Default ), interest will accrue on the Unpaid Sum from the due date up to but excluding the date of actual payment (both before and after judgment) at a rate which, subject to the following paragraph, is two per cent higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted a Loan in the currency of the Unpaid Sum for successive Loan Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any such interest will be immediately payable by the Borrower on demand by the Facility Agent. If any Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of any Loan Interest Period relating to such Loan: (a) the first Loan Interest Period for that Unpaid Sum will have a duration equal to the unexpired portion of the current Loan Interest Period relating to the Loan; and (b) the rate of interest applying to the Unpaid Sum during that first Loan Interest Period will be two per cent. higher than the rate which would have applied if the Unpaid Sum had not become due. If the Borrower fails to pay any amount of interest under a Senior Finance Document on its due date, the Borrower will pay liquidated damages to the Facility Agent for the account of the Finance Parties in an amount to be determined by the Facility Agent as being, in respect of the period from the due date of payment until receipt by the Facility Agent of the relevant amount, the equivalent of interest at a rate to be determined in accordance with the first paragraph of this section Interest on Overdue Amounts, applied to the relevant overdue amount. Repayment The Borrower must pay and discharge all amounts under the Loan in full on the Loan Final Maturity Date, subject to the various provisions regarding repayment and prepayment in whole or in part. Scheduled Amortisation (a) On each Loan Payment Date, the Borrower is obliged to repay the Loan by an aggregate amount equal to 0.25 per cent. of the amount of the facility under the Senior Facility Agreement as of 31 August 2006, being A1,195,562,471; provided, however, that if a portion of the Loan is repaid pursuant to Special Repayments below or is prepaid following a disposal of any Property, then the amortisation instalments due on each Loan Payment Date after such repayment or prepayment will be adjusted to equal 0.25 per cent. of the sum of (i) the amount 72

73 deposited by the Borrower in the Cash Collateral Account on or prior to such Loan Payment Date which remains on deposit therein on such Loan Payment Date, plus (ii) the sum of the Allocated Loan Amounts of those Properties as to which (A) on or prior to such Loan Payment Date, Land Charges in favour of the Borrower Security Trustee have been delivered, and (B) such Land Charges have not, on or prior to such Loan Payment Date, been released. (b) Each amount required to be repaid by the Borrower on each Loan Payment Date in accordance with the preceding paragraph (each, an Amortisation Instalment) in respect of any part of the Loan that has been advanced to the Cash Collateral Account and had not been released in accordance with the terms of the Senior Facility Agreement (but not any interest accrued thereon pursuant to the provisions hereof) will be paid from amounts then on deposit in the Cash Collateral Account. Special Repayments The Borrower may deposit cash collateral (which may be funded from a utilisation under the Senior Facility Agreement) into the Cash Collateral Account. The Borrower may instruct the Facility Agent to invest all or a portion of the funds held in any Cash Collateral Account in Loan Level Eligible Investments to be held in the name of the Facility Agent; provided that security agreements for the benefit of the Senior Secured Parties in form and substance satisfactory to the Borrower Security Trustee shall have been executed and delivered with respect to each such Cash Collateral Account and the holding of the Loan Level Eligible Investments. If it elects to do so and does not apply the amounts on deposit to acquire new Properties in accordance with the Senior Facility Agreement prior to the Loan Payment Date falling in April 2007, then the Borrower may elect to repay a portion of the Loan, up to a cumulative amount equal to the amounts so deposited, from time to time prior to the Loan Payment Date falling in April In such event, a portion of the amount on deposit in the Cash Collateral Account will be applied by the Facility Agent to repay the Loan in the amount of each such repayment, subject to the following: (a) (b) (c) (d) the Borrower will give the Lender at least six Business Days advance notice of each repayment hereunder, no more than one repayment may occur in any 30-day period, on the date of each such repayment, the Borrower will pay to the Facility Agent for the account of the Lenders (as a direct cash payment from a source other than the Cash Collateral Account) the amount of accrued interest (including the margin) and Mandatory Costs (if any) on the amount so repaid to the date of such repayment, plus all associated hedging break costs (if any), plus all Break Costs (if any) attributable to the portion of the Loan repaid together with interest that would have accrued on through the next Loan Payment Date had such repaid amount remained outstanding until such next Loan Payment Date, and interest actually received on amounts deposited in the Cash Collateral Account are for the Borrower s account. If the Borrower designates a further Property or Properties prior to 20 April 2007 and the Facility Agent and the Borrower Security Trustee receive a security agreement in respect of such Property or Properties (each a Deferred Property) in form and substance reasonably satisfactory to each of them, then, unless waived by the Facility Agent, the Facility Agent will promptly release to the Borrower a portion of the amounts deposited in the Cash Collateral Account (together with any interest accrued on amounts held in the Cash Collateral Account to but excluding the date of such release) equal to the lesser of (i) the Allocated Loan Amount of such Deferred Property; and (ii) the remainder of the amounts so deposited. The Borrower may not designate any Deferred Properties more than twice in any 30-day period. The Borrower instructs the Facility Agent to apply, on the Loan Payment Date in April 2007, all amounts then on deposit in the Cash Collateral Account (other than amounts constituting interest earned on amounts deposited by the Borrower or any Guarantor in such Account) to repay the Loan, and the Borrower hereby agrees to pay the Facility Agent for the account of the Lenders on such Loan Payment Date an additional amount equal to accrued interest (including the Margin and Mandatory Cost (if any) on the amount so repaid to the date of such repayment, plus all associated hedging break costs (if any). 73

74 Prepayment Voluntary prepayment of the Loan The Borrower may, upon not less than six Business Days prior notice (or such shorter period as the Majority Lenders may agree), prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of the lesser of A10,000,000 and the amount outstanding under the Senior Facility). Any such voluntary prepayment will be applied to reduce the obligations of the Borrower to pay Amortisation Instalments in order of maturity. Illegality If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by the Senior Facility Agreement or to fund or maintain its participation in the Loan: (a) that Lender will promptly notify the Facility Agent upon becoming aware of that event; (b) upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; (c) the Borrower will repay that Lender s participation in the Loan on the last day of the last Loan Interest Period ending prior to the date notified by the Lender and occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law); and (d) if the Borrower is able to procure another Lender or other person reasonably satisfactory to the Facility Agent to accept a transfer at par of all the rights and obligations of the Lender affected by the illegality, and that transfer is completed in accordance with the Senior Facility Agreement prior to the date repayment or prepayment would have been required under paragraph (a) above, no repayment, prepayment or cancellation will be required under paragraph (c) above. Right of repayment and cancellation in relation to a single Lender (a) If: (i) any sum payable to any Lender by the Borrower is or will be required to be increased under the tax gross-up provisions of the Senior Facility Agreement; or (ii) any Lender claims indemnification from the Borrower under the tax indemnity or increased costs provisions of the Senior Facility Agreement; or (iii) any Lender notifies the Facility Agent of its additional cost rate under the Mandatory Cost calculations in the Senior Facility Agreement, the Borrower may give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender s participation in the Loan. (b) On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender will immediately be reduced to zero. (c) On the last day of each Loan Interest Period which ends after the Borrower has given notice under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower will repay that Lender s participation in the Loan. (d) If the Borrower is able to procure another Lender or other person reasonably satisfactory to the Facility Agent to accept a transfer at par of all the rights and obligations of the Lender affected by the circumstances set out in paragraph (a) above, and that transfer is completed in accordance with the Senior Facility Agreement prior to the date repayment or prepayment would have been required under paragraph (a) above, no repayment, prepayment or cancellation will be required under paragraph (a) above. Mandatory prepayments (a) If at any time a Change of Control occurs, then: (i) the Borrower will promptly notify the Facility Agent upon the Borrower becoming aware of that event; and 74

75 (ii) the Facility Agent will, if the Majority Lenders so require, promptly cancel the Senior Facility and declare the Loan, together with accrued interest and all other amounts accrued under the Senior Finance Documents, immediately due and payable, whereupon the Senior Facility will be cancelled and all such outstanding amounts will become immediately due and payable, plus interest that would have accrued on the amount prepaid to the next Loan Payment Date, had such prepayment not occurred. (b) (c) On the date of each Disposal of any Property pursuant to the provisions summarised in paragraphs (g) and (h) of General Undertakings or on the immediately following Loan Payment Date, as the Borrower may elect, the Facility Agent will (through application of Disposal Proceeds deposited in the Sales Account on the date of such Disposal) cause the Loan to be prepaid in an amount equal to the aggregate Release Amount of such Property subject to a Disposal (or, following a casualty or expropriation, in such other amount as may be specified in Clause 21.5), in accordance with the provision summarised at paragraph (h)(iii) below. Following any (i) voluntary prepayment of the Loan as described above or (ii) any Disposal of a Property for which the full Release Amount is prepaid in accordance with the provisions summarised in paragraphs (i) and (j) of General Undertakings below, the Facility Agent will recalculate the Allocated Loan Amounts for the remaining Properties by applying the amount of such voluntary prepayment (in the case of (i)) or the Release Amount Differential (in the case of (ii)) pro rata (in accordance with the Allocated Loan Amounts in effect immediately prior to such application) to reduce the then existing Allocated Loan Amounts for the remaining Properties. Restrictions (a) Save where a notice of prepayment is given in relation to a Disposal of a Property and such Disposal does not occur, any notice of prepayment is irrevocable. (b) Any prepayment under the Senior Facility Agreement will be paid to the Facility Agent and be made together with: (i) (ii) accrued interest (including the margin) and Mandatory Costs (if any) on the amount prepaid to the date of prepayment; all Break Costs (if any) attributable to the portion of the Loan prepaid (all such Break Costs to be paid to the Facility Agent for the account of the Lenders); (iii) provided, however, that if any portion of the Senior Facility has theretofore been securitized, a corresponding portion of such prepayment will be accompanied (in addition to all other amounts specified herein) by all interest that would have accrued thereon through the next Loan Payment Date had such prepaid amount remained outstanding until such Loan Payment Date; and (iv) associated hedging break costs (if any). (c) The Borrower may not reborrow any part of the Senior Facility which is prepaid. Prepayment Fee If the Borrower makes any prepayment, prepayment fees will be payable by the Borrower to the Originator in certain circumstances until July 2009 as agreed between the Borrower and the Originator. The Issuer will not acquire the right to receive prepayment fees from the Borrower, either under the Loan Sale Agreement or otherwise. Representations and warranties The representations and warranties given by the Borrower to each Finance Party under the Senior Facility Agreement, include among other things, the following representations: 75

76 (a) (b) (c) (d) (e) (f) (g) (h) (i) Each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV is or at the time of the First Utilisation Date will be duly organized and validly existing and, in the case of JV Holding BV, the Master Lessee, KQ KG and the WH SPV, with limited liability under the laws of its jurisdiction of incorporation. Each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV has the power and all necessary authorisations under the laws of all applicable jurisdictions to own its assets and carry on its business in all material respects contemplated in its organizational documents. No corporate action, legal proceeding, or other procedure or step, in each case in furtherance of an insolvency proceeding, including without limitation any process by creditors, has been taken or threatened against any of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG, WH SPV or any of their respective assets, and none of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG or the WH SPV is insolvent. The Borrower has furnished the Facility Agent with true and complete certified copies of its constitutive documents and of the constitutive documents of each of the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV, in each case as in effect on 27 March 2006 or, if not in existence on such date, on the date of their respective establishment. Subject to the Reservations, (i) the obligations expressed to be assumed by each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV in each Senior Finance Document are legal, valid, binding and enforceable obligations of each such party; and (ii) without limiting the generality of paragraph (i) above, and subject to the Reservations and to any perfection requirements that need to be fulfilled, each Senior Security Document (as and when entered into and, where relevant, when registered or filed) to which each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV is a party creates a valid and enforceable security interest over the assets which such Senior Security Document purports to creates (with the priority and perfection specified therein). The entry into and performance by the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV of, and the transactions contemplated by, the Senior Finance Documents do not and shall not: (i) conflict with: (A) any material law or material regulation applicable to the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV; (B) the constitutional documents of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV; or (ii) breach any agreement binding upon the Borrower or Master Lessee or any of their respective assets, except for any such breaches, which, together, will not result in a Material Adverse Effect; or (iii) result in the existence of, or oblige it to create, any security over the assets of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG or WH SPV other than as permitted under the negative pledge undertaking of the Borrower in the Senior Facility Agreement. Each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Senior Finance Documents to which it is a party and the transactions contemplated by those Senior Finance Documents. No limit on the powers referred to in paragraph (g) will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Senior Finance Documents. Subject to the Reservations, all authorisations required: 76

77 (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (i) to enable each of the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV lawfully to enter into, exercise its rights and comply with its obligations in the Senior Finance Documents to which it is a party; and (ii) to make the Senior Finance Documents to which it is a party admissible in evidence in Germany or The Netherlands, have been obtained or effected and are in full force and effect. Save for the (i) Reservations and (ii) the registration or notarisation of any Senior Finance Document with any relevant tax authority, land registry or notary, it is not necessary that the Senior Finance Documents be filed, recorded or enrolled with any court or other authority in any relevant jurisdiction or that any real estate transfer taxes, registration or similar tax or fee be paid on or in relation to the Senior Finance Documents or the transactions contemplated by the Senior Finance Documents. No Loan Default or Loan Event of Default is continuing or would reasonably be expected to result from the making of the utilisations or the entry into, the performance of, or any transaction contemplated by, the Senior Finance Documents. No other event or circumstance is outstanding which constitutes a default or termination event (however described) under any other material agreement or instrument which is binding on the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV, or to which their respective assets are subject which would reasonably be expected to result in a Material Adverse Effect. It is not required to make any deduction for or on account of Tax from any payment it may make under any Senior Finance Document. To the best of the knowledge of the certain named officers of KarstadtQuelle AG and Whitehall 2005, all factual information delivered by or on behalf of KarstadtQuelle AG since 1 January 2005 to the providers of the Reports in connection with the Reports was true and accurate in all material respects as of the date of the relevant delivery. To the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005, no event or circumstance known to or reasonably discoverable by the Borrower or any party has occurred or arisen and no information known or reasonably discoverable by the Borrower or any party to the Acquisition Documentation has been omitted from the Environmental Report and no information has been given or withheld by the Borrower or any party to the Acquisition Documentation that results in the information, opinions, intentions, forecasts or projections contained in the Environmental Report, being untrue or misleading in any material respect. To the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005, no information with respect to the Properties has knowingly been withheld by KarstadtQuelle AG or Karstadt Immobilien GmbH & Co. KG which, if disclosed would reasonably be expected to have or evidence the existence of a Material Adverse Effect. To the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005, nothing has occurred in relation to the Properties since the date any information referred to in paragraphs (n) through (r) was so provided and prior to the execution and delivery of the Senior Facility Agreement, which would reasonably be expected to have a Material Adverse Effect. The Borrower will be deemed not to be in the breach of the Senior Facility Agreement in respect of any information that would have constituted a Loan Default under the Senior Facility Agreement but was known to the Facility Agent or to certain named employees of Goldman Sachs (this term is not defined in the Senior Facility Agreement) prior to 27 March The initial budget to be delivered by the First Utilisation Date will be prepared after careful consideration and in good faith on the basis of assumptions, which were reasonable as at the date it was prepared. 77

78 (t) The budgets and forecasts supplied under the Senior Facility Agreement have been prepared in good faith on the basis of recent historical information and on the basis of assumptions believed in good faith by KarstadtQuelle AG and Whitehall 2005 to be reasonable as at the date they were prepared and supplied. (u) The financial statements delivered in accordance with the Senior Facility Agreement will comply with the requirements thereof. (v) Its payment obligations under the Senior Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. (w) Except as may be known to the Facility Agent or certain named employees of Goldman Sachs (this term is not defined in the Senior Facility Agreement) on 27 March 2006, no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency has (to the best knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005) been started or threatened against the Borrower, any party to the Acquisition Documentation, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV, or any of the Properties which are reasonably likely to be adversely determined and, if so adversely determined, would have a Material Adverse Effect. (x) Save as disclosed in the Environmental Report, all environmental law relating to any Property has been complied with, and all environmental permits applicable to any Property have been obtained, save where non-compliance with the provisions of this paragraph, in the aggregate, is not reasonably likely to have a Material Adverse Effect. (y) Save as disclosed in the Environmental Report, no environmental claim has been commenced or (to the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005) is threatened against the Borrower or any party to the Acquisition Documentation, the Parent, JV Holding BV, the Master Lessee, KQ KG or WH SPV where that environmental claim is reasonably likely to be adversely determined and, if determined against any such person, would have a Material Adverse Effect. (z) Save as disclosed in the Environmental Report, to the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005, the Properties owned or leased by the Borrower do not contain hazardous materials in a quantity or location that will or would reasonably be likely to result in either an environmental claim or any clean up responsibility under environmental law, except for environmental claims and clean up responsibilities which, in the aggregate, are not reasonably expected to have a Material Adverse Effect. (aa) The Borrower has not traded or carried on any business since its formation other than acquiring, refurbishing, managing, letting and owning the Properties and any other activities consistent with owning and letting the Properties (in compliance with Sec. 9 no. 1 sentence 2 of the German Trade Tax Act), disposing the Properties in the ordinary course of business and undertaking activities consistent with the Senior Finance Documents. (bb) Each of the Master Lessee, the Parent, JV Holding BV, KQ KG and WH SPV is a Single Purpose Entity and has not traded or carried on any business or activity since its formation that would cause it not to be a Single Purpose Entity. (cc) The Borrower represents and warrants that: (i) it has at no time had and does not have a place of management, branch, agency, permanent establishment, business establishment or other fixed or permanent place of business outside The Netherlands; (ii) no rent payable to the Borrower is subject to a requirement to make a Tax Deduction; (iii) it has not agreed to pay or withhold any Tax on behalf of the Equity Holders or any of their Affiliates; (iv) no claims or investigations by a Tax authority are being or are reasonably likely to be made or conducted against it which are reasonably likely to result in a liability of, or claim against, the Borrower to pay any material amount of Tax; 78

79 (v) it is not overdue in the filing of any Tax returns or filings and it is not overdue in the payment of Taxes other than: (A) Taxes (1) that are being contested in good faith and (2) for which adequate reserves are being maintained; and (B) returns, filings and Taxes with respect to which the failure to file or pay will not have a Material Adverse Effect; (dd) save to the extent that any supplies in relation to a Property are tax exempt without excluding the deductibility of input VAT and unless any supply constitutes a transfer of a going concern within the meaning of Sec. 1(1a) of the VATA, it has treated all supplies in relation to a Property as if they were subject to VAT pursuant to Sec. 9 of the VATA. (ee) Upon consummation of the transactions contemplated in the Acquisition Documentation, Borrower shall have a good, valid and marketable title to, or valid leases or licences of, and all appropriate authorisations to use, the assets necessary to carry on its business as currently intended to be conducted. (ff) Upon consummation of the transactions contemplated in the Acquisition Documentation as to any Property, Borrower shall be the sole legal and beneficial owner of, and will have good, valid and marketable title to, or valid leases or licences of, each of the Properties which are expressed to be the subject of any security created or expressed to be created under the Senior Finance Documents, which shall be free of any Encumbrance and Restriction, save: (i) for any Permitted Encumbrance; (ii) items disclosed in the Legal Due Diligence Report; (iii) in relation to those movable goods, equipment or any other asset used in the ordinary course of its business which are leased, licensed or provided free of charge to Borrower in the ordinary course of business; and (iv) any other item which (together with all such other items) does not materially adversely affect the use or value of such Property. (gg) Upon consummation of the transactions contemplated in the Acquisition Documentation as to any Property, no security shall exist over such Property except as permitted under the negative pledge undertaking in the Senior Facility Agreement. (hh) As of the First Utilisation Date, all of the Shares in the Borrower will be fully paid and pledged to the Borrower Security Trustee as first-priority security for the Loan. (ii) The partnership interests in or Shares of, as applicable: (i) the Borrower is Wholly-Owned by Parent and JV Holding BV; (ii) the Parent is Wholly-Owned by KQ KG, WH SPV and JV Holding BV; (iii) JV Holding BV is Wholly-Owned by KQ KG (49 per cent.) and WH SPV (51 per cent.); (iv) the Master Lessee is Wholly-Owned by KQ KG (49 per cent.) and WH SPV (51 per cent.); (v) KQ KG is indirectly Wholly-Owned by KarstadtQuelle AG; and (vi) WH SPV is Wholly-Owned by Whitehall (jj) The group structure chart delivered in connection with the Loan is true, complete and accurate. (kk) The Borrower has supplied the Facility Agent with a true and complete copy of the Master Lease, each Permitted Sublease, the Acquisition Documentation, each agreement with a Managing Agent, and each other agreement material (i) to the Borrower or to any Property, or (ii) to the Master Lessee or the Parent. The Master Lease and each Permitted Sublease is in full force and effect. (ll) None of the Borrower, the Master Lessee or the Parent has any material liability in respect of any pension scheme or arrangement and there are no circumstances which would give rise to any such liability. Neither the Borrower, the Master Lessee nor the Parent has ever had any employees. 79

80 (mm)from and after the First Utilisation Date, no direct Lease will be in effect as to any property of the Borrower, the Master Lessee or the Parent, except for the Ground Leases, the Master Lease, the master lease between the Master Lessee and Highstreet A Portfolio GbR, the Permitted Subleases, and the Dritte Leases. (nn) In any proceedings taken in its jurisdiction of incorporation in relation to the Senior Finance Documents to which the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG and WH SPV is a party: (i) the choice of German (or Dutch, as the case may be) law identified as the governing law of the Senior Facility Agreement and each other Senior Finance Document to which it is a party (as stated in the relevant Senior Finance Document); and (ii) any judgment obtained in Germany, will (subject to the Reservations) be recognized and enforced. (oo) No: (i) corporate action, legal proceeding or other procedure or step described in paragraph (k) of Loan Events of Default below; or (ii) creditors process described in paragraph (n) of Loan Events of Default below; has been taken or, to the knowledge of the Borrower, threatened in relation to the Borrower, the Parent, the JV Holding BV, the Master Lessee, KQ KG and WH SPV; and none of the circumstances described in paragraph (j) of Loan Events of Default applies to the Borrower, the Parent, JV Holding BV, the Master Lessee, KQ KG or WH SPV. (pp) The representations and warranties made under the Acquisition Documentation are, to the best knowledge of the certain named officers of KarstadtQuelle AG and Whitehall 2005, true and correct. (qq) The Borrower does not require a license as a credit institution (Krediteinstellung) under section 6 of the Dutch Banking Act. (rr) The Borrower has used all reasonable efforts to verify the status of each Lender as: (i) a Professional Market Party; or (ii) forming part of a Restricted Circle with the Borrower. The Repeating Representations are made and shall thereafter be deemed to be repeated by the Borrower by reference to the facts and circumstances then existing on the date of each utilisation request and the first day of each Loan Interest Period, except that the representation in paragraph (u) will be deemed repeated on each date on which the Borrower delivers financial statements in accordance with the Senior Facility Agreement. Undertakings The Borrower has given various undertakings under the Senior Facility Agreement as described below. Information undertakings The information covenants include, among other things, the following: (a) The Borrower shall supply to the Facility Agent: (i) as soon as the same become available, but in any event within 120 days after the end of each of its financial year, the separate financial statements of the Borrower and the Master Lessee (each audited to the extent required in accordance with Applicable Accounting Principles) for that financial year; and (ii) as soon as the same become available, but in any event within 45 days after the end of each financial quarter, the separately unaudited financial statements of the Borrower and Master Lessee for that financial quarter, together with a comparison (in a form approved by the Facility Agent) of actual and budgeted results. 80

81 (b) (c) (d) (e) (f) (g) (h) (i) (j) Each set of financial statements delivered by the Borrower shall be certified by a director of the Borrower as fairly representing the financial condition of Borrower or Master Lessee, as the case may be, as at the date as at which those financial statements were prepared. The Borrower shall procure that each set of financial statements is prepared (in the case of any management account, to the extent applicable) using Applicable Accounting Principles, and accounting practices and financial reference periods consistent from one period to the next, unless the Borrower notifies the Facility Agent that there has been a change in Applicable Accounting Principles, or the accounting practices or reference periods, in which case its auditors will deliver to the Facility Agent: (i) a description of any change necessary for those financial statements to reflect Applicable Accounting Principles, or such accounting practices or reference periods; and (ii) sufficient information, in form and substance satisfactory to the Facility Agent, acting reasonably, to enable the Lenders to make an accurate comparison between the financial position indicated in those financial statements and the Borrower s or Master Lessee s previous financial statements, including without limitation a reconciliation showing changes affecting the determination of ICR for the relevant period and for all prior periods during which any amount was outstanding under the Senior Facility. The thresholds in the Senior Facility Agreement for ICR in paragraph (c) of General Undertakings below and the definition of Cash Trap Period will be modified accordingly. The Borrower shall supply to the Facility Agent at the end of each financial quarter copies of a report, in form and substance satisfactory to the Facility Agent (acting reasonably), as to all quantities necessary to determine Net Rental Income for such quarter, as well as projection of Net Rental Income for the ensuing financial quarter. Prior to the First Utilisation Date and at least 60 days prior to the beginning of each calendar year thereafter, Borrower shall supply to the Facility Agent a budget for the forthcoming annual period (such budget to be subject to the approval of the Facility Agent if a Loan Event of Default is then continuing). The Borrower shall supply to the Facility Agent promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are pending or, to the best of the knowledge of the Borrower, threatened against the Borrower, Master Lessee or Parent, each of which involves a claim in excess of A500,000. The Borrower shall notify the Facility Agent of any Loan Default (and the steps, if any, being taken to remedy it) promptly upon it becoming aware of its occurrence. Promptly upon a request by the Facility Agent, the Borrower will deliver to the Facility Agent a certificate signed by one director or senior officer on its behalf certifying that no Loan Default is continuing (or if a Loan Default is continuing, specifying the Loan Default and the steps, if any, being taken to remedy it). The Borrower shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent or any Lender in order for the Facility Agent, such Lender or any prospective new Lender to carry out and be satisfied with the results of all necessary know your customer or other checks in relation to any person that it is required to carry out pursuant to the transactions contemplated in the Senior Finance Documents including, but not limited to, any change in an Equity Partner (other than any change to an Equity Partner where the ultimate ownership of the Equity Partner does not change). Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied with the results of all necessary know your customer or other checks in relation to any person that it is required to carry out pursuant to the transactions contemplated in the Senior Finance Documents including, but not limited to, any change in an Equity Partner (other than any change to an Equity Partner where the ultimate ownership of the Equity Partner does not change). 81

82 (k) The Borrower shall supply to the Facility Agent such information as is requested by the Facility Agent from time to time which is necessary for ongoing compliance with any Finance Party s internal money laundering regulations compliance procedures. General undertakings Pursuant to the Senior Facility Agreement, the Borrower agrees to be bound by, among other things, the following general covenants: (a) The Borrower shall promptly: (i) obtain, comply with and do all that is necessary to maintain in full force and effect; and (ii) supply certified copies to the Facility Agent of, any authorisation required under any law or regulation to enable it to perform its obligations under the Senior Finance Documents and to ensure, subject to the Reservations, the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Senior Finance Document. (b) The Borrower shall comply with all laws to which it or its properties or assets may be subject, if failure so to comply would materially impair its ability to perform its material obligations under the Senior Finance Documents. (c) ICR shall not be less than 135 per cent. as of two consecutive Loan Payment Dates. The Borrower shall supply to the Facility Agent (in sufficient copies for all the Lenders, if Agent so requests) on each Test Date, a compliance certificate setting out (in sufficient detail for the Facility Agent, acting reasonably) computations as to compliance with this paragraph. (d) The Borrower shall not create, permit or suffer to subsist any Encumbrance and Restriction over the whole or any part of its assets (except for Properties subject to security under the Senior Finance Documents). (e) The Borrower shall ensure that the Master Lessee does not create, permit or suffer to subsist any Encumbrance and Restriction over the whole or any part of the assets of Master Lessee. (f) Paragraphs (d) and (e) above do not apply to (i) any Permitted Encumbrances, or (ii) other violations of paragraph (d), (e) above or this paragraph (f), which, in the aggregate, are not reasonably likely to result in a Material Adverse Effect. (g) Borrower shall not permit or suffer to occur any Disposal, whether in a single transaction or a series of transactions, except in conformity the provisions of this paragraph (g) and paragraphs (h), (i), (j) and (k) and the requirement that prepayments be made on the Loan in accordance with the Senior Facility Agreement. (h) Paragraph (g) above does not apply to the following: (i) Borrower may lease the Properties pursuant to the Master Lease; (ii) disposals in the ordinary course of its business of movable goods and equipment; (iii) disposals of surplus, obsolete or redundant assets which are no longer required for the efficient operation of its business; (iv) disposals of cash or investments for purposes not prohibited by the Senior Finance Documents; and (v) the expropriation of all or part of any Property by any applicable governmental agency or authority; provided, that the Net Disposal Proceeds of any such disposition are applied in accordance with paragraphs (i) and (j) below. (i) Paragraph (g) above does not apply to the Disposal by the Borrower of its interest in a Property (including a Disposal by way of transfer to Highstreet A Portfolio GbR) if: (i) no payment Loan Default or Loan Event of Default is continuing or would occur following such Disposal; (ii) the Borrower gives at least six Business Days prior notice of such Disposal: 82

83 (j) (A) specifying which Property is to be disposed of and the consideration (exclusive of any VAT) to be paid for such Property upon disposal; (B) calculating the application of the Net Disposal Proceeds in accordance with paragraphs (i)(iii) and (j) below; and (C) specifying, if any Tax (including any VAT Adjustments) is, or may be, payable by the Borrower upon, as a consequence of or in respect of such disposal, the amount of such Taxes or VAT Adjustment which will, or may, be incurred or become payable upon such disposal; (iii) prior to or immediately upon such Disposal, the Borrower procures that the Net Disposal Proceeds of such disposal (together with, if such Net Disposal Proceeds are not sufficient to meet the aggregate of the amounts set out in paragraphs (A) and (B) below, an amount equal to the difference between the aggregate of paragraphs (A) and (B) and the Net Disposal Proceeds of such disposal) in an amount equal to the aggregate of: (A) the Release Amount for that Property; and (B) accrued interest and Mandatory Cost, if any, up to the date of the associated prepayment, and any other interest, costs, fees and expenses (including without limitation any Break Costs and associated hedging break costs) then due and payable to the Lenders and an additional amount equal to interest on a corresponding portion of such prepayment to the next Loan Payment Date as though such prepayment had not occurred, in lieu of Break Costs, is deposited in immediately cleared funds into the Sales Account for application as described below in The Structure of the Accounts Sales Account ; and (iv) the Borrower confirms that, in addition to the proceeds to be deposited into the Sales Account in accordance with paragraph (iii) above, there will be sufficient funds to pay or discharge direct third party costs and expenses (including VAT thereon) on account of such disposal. Notwithstanding paragraph (i), if a Disposal consists of damage or destruction to any Property, or the expropriation of all or a portion of a Property, then the following will apply: (1) if such damage or destruction constitutes a Termination Major Casualty, or if such expropriation is of all or substantially all of a Property, then all the associated insurance or expropriation proceeds up to the Release Amount for the applicable Property or Properties will be paid to the Lenders as a prepayment of the Loan (together with interest, Mandatory Costs, associated prepayment and any other costs, fees and expenses, and any hedge break costs) on the date of receipt of such proceeds or on the next Interest Payment Date, as the Borrower may elect, and (2) otherwise (a) the associated insurance or expropriation proceeds will be released by the Facility Agent from time to time to fund the restoration of the applicable Property, subject to reasonable conditions to disbursement analogous to those customarily utilized in construction loans for comparable commercial projects, (b) after completion of such restoration, any remaining proceeds (up to the Release Amount for the applicable Property or Properties) will be paid to the Lenders as a prepayment (together with such interest and other amounts), and (c) the Release Amount for such Property will be reduced by the amount of any prepayments under this subclause; provided, that if the Borrower delivers a letter of credit to the Facility Agent satisfying the requirements of paragraph (ii) of the definition of Termination Material Casualty, then the Facility Agent will promptly disburse the insurance proceeds to the General Account. If excess proceeds remain after payment to the Facility Agent and the Lenders of all amounts required in respect of a Termination Major Casualty or expropriation pursuant to this subclause, then the process described below in The Structure of the Accounts Sales Account will apply to such excess. If insurance proceeds remain in the Sales Account at a time when the affected Property is subject to a Disposal, then, upon receipt by the Facility Agent of the applicable Release Amount and all other payments required under The Senior Facility Agreement in connection with such Disposal, the Facility Agent will release such insurance proceeds to the General Account. 83

84 (k) If the Borrower disposes of a Property as a result of which the full Release Amount for such Property is prepaid to the Lenders, together with other applicable amounts described above (or if the Borrower elects to make such prepayment on the next Loan Payment Date as permitted hereunder, then if associated Disposal Proceeds (or other funds) in an amount at least equal to such full Release Amount together with such other applicable amounts have been deposited into the Sales Account as provided in the Senior Facility Agreement), then the Borrower Security Trustee, on behalf of the Finance Parties, at the request of the Borrower, shall promptly release all interests in such Property from the security created under the Senior Finance Documents and shall promptly, at the Borrower s expense, execute all deeds and documents and take all actions reasonably necessary so to release such security. (l) The Borrower shall not, without the prior written consent of the Facility Agent: (i) permit any Financial Indebtedness to be outstanding to it by, or to make any other form of credit available to, any person; (ii) incur or have outstanding any indebtedness to any affiliate of the Borrower; (iii) incur or have outstanding any Financial Indebtedness to any other person; or (iv) pay or discharge (including, without limitation, by way of set-off; or (v) combination of accounts), or grant any guarantee, indemnity, bond, letter of credit or similar assurance against financial loss in support of, any indebtedness or other liability owed by it or any other person. (m) Subject to paragraphs (q) and (r) below, paragraph (l) above does not apply to any Financial Indebtedness: (i) under or permitted by a Senior Finance Document or arising under a Mezzanine Finance Document; (ii) to the Parent or its direct or indirect equity holders (other than guarantees of the Mezzanine Loan enforceable only upon acceleration of the Senior Facility); provided, in each case, that such Financial Indebtedness is subordinated to amounts owing to a Finance Party under the Senior Finance Documents; (iii) of the Borrower that arises in the ordinary course of such its business as a normal trade credit; (iv) under the general banking terms and conditions applicable to or any ancillary netting arrangements with the Account Bank, and any guarantee in relation to the same; (v) without double counting, under any Financial Indebtedness (other than indebtedness for borrowed money) secured by a Permitted Encumbrance; (vi) customary warranties and indemnities in connection with the Disposal of Properties; or (vii) approved by the Facility Agent in writing. (n) Borrower shall assure that Master Lessee shall not, without the prior written consent of the Facility Agent, have outstanding any Financial Indebtedness or credit owed by or to the Master Lessee except such as arises in the ordinary course of Master Lessee s business as a normal trade credit pursuant to the Master Lease or the Material Subleases. (o) The Borrower shall not enter into any amalgamation, demerger, merger or corporate reconstruction or acquire a company or any other person or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate or establish a company or other person, in each case, without the prior written consent of the Majority Lenders. (p) The Borrower shall assure that the Master Lessee does not enter into any transaction, or take any action, of the kind described in paragraph (o) without the prior written consent of the Majority Lenders. (q) The Borrower shall only conduct the business of owning, refurbishing, managing, maintaining and selling the Properties and leasing such Properties pursuant to the Master Lease. 84

85 (r) (s) (t) (u) (v) The Borrower will assure that the Master Lessee shall conduct no business other than acting as lessee under the Master Lease and under a corresponding lease of properties from Highstreet A Portfolio GbR, and entering into and performing subleases of portions of the Properties. The Borrower will assure that the Master Lessee does not assign any of its rights under the Master Lease (other than delegating the right to collect rent to the Managing Agents as contemplated by the Senior Facility Agreement). The Borrower shall: (i) have no place of management, branch, agency, permanent establishment, business establishment or other fixed or permanent place of business outside The Netherlands; (ii) comply with all Tax laws (including for the avoidance of doubt all tax treaties) in all material respects; (iii) comply with all requirements to make, deliver or amend returns (including income tax returns) required to be made by it to any Tax Authority and with all time limits relating to the filing of such returns; (iv) pay all Taxes due and payable by it no later than the date on which such Taxes are required to be paid, unless: (A) payment of these Taxes is being contested in good faith; (B) adequate reserves for the payment of such Taxes (and interest or penalties) are being maintained by it; and (C) payment of such Taxes (and interest or penalties) can be lawfully withheld; or (D) failure to pay those Taxes does not and will not have a Material Adverse Effect; (v) not become a party to any arrangements providing for the discharge by it of a Tax liability of any other company or person, not become a party to any group taxation regime as a result of which it would become liable for a Tax Liability of any other company or person and, in particular, not agree to pay or withhold any Tax on behalf of the Equity Holders or any of their Affiliates; The Borrower shall not become a member of any VAT Group and save to the extent that any supplies in relation to a Property are tax exempt without excluding the deductibility of input VAT and unless any supply constitutes a transfer of a going concern within the meaning of Sec. 1(1a) of the VATA, treat any supplies in relation to a Property as if they were subject to VAT pursuant to Sec. 9 of the VATA. The Borrower shall, subject to the Senior Facility Agreement, comply with the terms of the Hedge Documents. The Borrower shall, prior to the Effective Date, enter into, and maintain, Hedge Documents and such Hedge Documents and related documentation shall: (i) be with a Counterparty; (ii) have an aggregate notional principal amount not less than the principal amount outstanding of the Loan plus the principal amount of the Mezzanine Facility, but which notional principal amount shall decrease from time to time in an amount equal to repayments or prepayments of the Loan and the Mezzanine Facility in accordance with the terms of the Senior Facility Agreement and the Mezzanine Facility Agreement, (iii) have settlement dates that coincide with the Loan Payment Dates; (iv) be based substantially in the form of a long form confirmation or such other form satisfactory to the Facility Agent (acting reasonably); (v) have a term expiring not earlier than the Loan Final Maturity Date; and (vi) be secured in favour of the relevant Finance Parties or Mezzanine Finance Parties, as applicable, in a manner acceptable to the Facility Agent. 85

86 (w) Save in the case of Goldman Sachs International (acting in its capacity as Counterparty) and its Affiliates, if at any time a Counterparty falls below the short term credit rating of at least A-1 from Standard & Poor s Rating Services, at least F1 from Fitch and at least P1 from Moody s, the Borrower will notify the Facility Agent and procure that, within 30 days of that ratings downgrade, the Counterparty whose rating was downgraded shall novate each of the Hedge Documents to which it is a party to a person reasonably satisfactory to the Facility Agent that does satisfy that rating requirement. (x) The Hedge Documents will consist either of (i) a swap into a fixed interest rate equivalent to the 5-year euro swap rate or such other reference rate as determined by the Facility Agent or other Counterparty reasonably acceptable to the Facility Agent, or (ii) a fully-paid interest rate cap with a 3-month EURIBOR strike price of 3.70 per cent., in either case in form and substance satisfactory to the Facility Agent. (y) While a Loan Default or Cash Trap Period is continuing, the Borrower shall not make any distribution to its equityholders or pay any dividend, fee or expense in the nature of or intended to act as a direct or indirect distribution to any of its equityholders, or make any payments in respect of Financial Indebtedness owed to any of its direct or indirect equityholders, except distributions made within ten Business Days after the First Utilisation Date to effect a payment contemplated by the Senior Facility Agreement. (z) The Borrower shall not, and shall procure that the Master Lessee shall not, without the prior written consent of the Facility Agent: (i) redeem, repurchase, defease, retire or repay any of its Shares, or resolve to do so (except for capital reductions that do not result in any distributions being declared or made, and except for amounts which may be paid as described in paragraph (y) above); (ii) issue any Shares to any person other than Shares issued to Parent and JV Holding BV and provided any such Shares are or immediately become subject to valid and binding fixed security under a Senior Finance Document in favour of the Borrower Security Trustee; or (iii) subscribe for or otherwise acquire any Share or make any investment in any other person. (aa) The Borrower shall not, and will procure that the Master Lessee and Parent will not, enter into any new material contract or agree to any amendment to, or extension or waiver of, any provision of a material contract, without in each case the prior written approval of the Facility Agent. (bb) The Borrower will not, and will procure that the Master Lessee will not, consent to any new Material Sublease, or agree to any amendment to, or extension or waiver of, any provision of any Material Sublease, or permit assignment of any Material Sublease, without in each case the prior written approval of the Facility Agent. (cc) The Borrower will not amend, modify, extend or waive any of the provisions of the Master Lease, or assign any of its rights thereunder, without the prior written approval of the Facility Agent. (dd) Except as contemplated in the Permitted Subleases as in effect on the date hereof (relating to transfer of third party leases under 566 and 578 BGB (German Civil Code)), the Borrower will not enter into any new lease, or amend, modify, extend or waive any provision of, or assign any of its rights under, any lease other than the Master Lease or the Dritte Leases, without the prior written approval of the Facility Agent. (ee) The Borrower and the Lenders have agreed on a programme of capital expenditures to be executed by the Major Subtenants in accordance with the Permitted Subleases (the Deferred Capex Programme) for the Properties over the 24-month period (the Deferred Capex Period) following the First Utilisation Date, as described in the Environmental Report. The obligation to perform such Deferred Capex Programme will be borne by the Major Subtenants under the Permitted Subleases. The Borrower will report quarterly to Agent, in reasonable detail, as to the progress of such Deferred Capex Programme. 86

87 (ff) The Borrower shall not repudiate a Senior Finance Document or evidence in writing an intention to repudiate a Senior Finance Document to which it is a party. (gg) The Borrower shall provide prompt written notice to the Facility Agent upon becoming aware of the occurrence of any event which the Borrower determines (acting reasonably) is likely to result in a Material Adverse Effect. (hh) The Borrower shall assure that LTV on any Test Date (other than the First Utilisation Date) and on the first Business Day following the last day of the Availability Period is not greater than 70 per cent.; provided, however, that no breach of this paragraph (hh) will be deemed to arise if, on the first Business Day following the last day of the Availability Period or within 30 days following the applicable Test Date, as applicable, Borrower makes a prepayment of the Loan (if permitted by the other provisions of The Senior Facility Agreement) sufficient so that, after giving effect to such prepayment, LTV is not greater than 70 per cent. (ii) Borrower shall not acquire any real property or other material property, except pursuant to the Acquisition Documentation and except for alterations and budgeted items otherwise permitted pursuant to the provisions of the Senior Facility Agreement. (jj) At no time will the Borrower, the Master Lessee or the Parent have any employees, unless the Facility Agent specifically consents thereto in advance of the employment of each such person. Property undertakings (a) The Borrower shall: (i) comply with any material conditions attached to any planning permissions and comply with any material provision of any agreement or undertaking or permitted use under all planning acts or any other similar acts relating to or affecting its Property or make any material change in use of its Property otherwise than in accordance with the budget or as permitted by the provisions described in paragraphs (y) and (z) below; and (ii) not make any application for an exemption from a zoning plan, for planning permission or implement any exemption for a zoning plan or any planning permission obtained nor enter or agree to enter into any agreement or undertaking under any applicable planning legislation or any other similar act or acts without the prior written consent of the Facility Agent (such consent not to be unreasonably withheld or delayed) save that such consent shall not be required where the planning permission, agreement or undertaking relates to works to be carried out in accordance with the budget that are permitted by the provisions described in paragraphs (y) and (z) below and where no liability under the aforementioned acts is incurred by the Borrower. (b) The Borrower shall: (i) observe and perform all material restrictive and other covenants, stipulations, burdens, title conditions and obligations now or at any time affecting its Property; (ii) duly and diligently enforce all material restrictive or other covenants, stipulations, burdens, title conditions and obligations benefiting its Property and not waive, release or vary (or agree to do so) the material obligations of any other party thereto; and (iii) promptly take all such steps (including, without limitation, the execution, completion and delivery of documentation, returns, forms and certificates; the answering of any questions or correspondence from any Tax Authority or any land registry; and the payment of any fees and Taxes as may be necessary) that it is able to take to enable the security expressed to be created by the Senior Finance Documents to be validly registered at any land registry. (c) The Borrower shall, in relation to any Lease relating to its Property: (i) observe and perform all material covenants, stipulations and obligations on the lessor under any such Lease; (ii) duly and diligently enforce all material covenants on the part of the lessee under any such Lease; and 87

88 (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (iii) promptly notify the Facility Agent of any matter or event of which it becomes aware under or by reason of which any such Lease has or may become subject to determination or to the exercise of any right of re-entry or forfeiture or irritancy. The Borrower shall comply in all material respects with all environmental law and obtain and maintain any environmental permits where, in either case, a failure to do so is reasonably likely to have a Material Adverse Effect. The Borrower shall promptly implement (or procure the implementation of) all steps agreed between the Facility Agent and the Borrower (both parties acting reasonably) to be implemented under the Environmental Report and shall notify the Facility Agent when all such steps have been implemented fully. The Borrower shall notify the Facility Agent in writing as soon as reasonably practicable upon becoming aware of any environmental claim that has been commenced or (to the best of the Borrower s knowledge and belief) is threatened against the Borrower which relates to any breach of any environmental law which is material in the context of the business and activities of the Borrower. The Borrower shall not, without the prior written consent of the Facility Agent (such consent not to be unreasonably withheld or delayed) exercise any option, election or discretion to transfer or otherwise dispose of all or part of any right to credit or repayment in respect of any VAT from any Tax Authority. The Borrower shall request the Valuer to prepare and deliver to the Finance Parties, no later than 31 January of each year, a Valuation of each Property as of the immediately preceding 1 January, and the cost of each such Valuation shall be borne by the Borrower; provided that the first such Valuation hereunder will be as of 1 January 2008 and will be delivered no later than 31 January The Facility Agent may request the Valuer promptly to prepare and deliver to the Finance Parties a Valuation of each Property as the Facility Agent may direct at any time, and that the cost of each such Valuation shall be borne (i) by the Lenders if no Event of Default is continuing at the time of such request, and otherwise (ii) by the Borrower. The Borrower shall provide a copy to the Facility Agent of any Valuation obtained by the Borrower promptly upon obtaining the same. The Borrower shall at all times from and after the First Utilisation Date effect and maintain, or procure that Master Lessee, or the Major Subtenants effect and maintain, all risk insurance coverage with substantial and reputable insurance underwriters or insurance companies in respect of its property, trade and other fixtures and fixed plant and machinery forming part of its Property against loss or damage by fire, storm, tempest, terrorism (coverage for terrorism losses may be limited to an aggregate amount equal to 25 per cent. of the reinstatement value of the Properties), flood, earthquake, lightning, explosion, impact, aircraft and other aerial devices and articles dropped from them, riot, civil commotion and malicious damage, bursting or overflowing of water tanks, apparatus or pipes and such other risks and contingencies as are insured in accordance with sound commercial practice or which the Facility Agent may direct from time to time (acting reasonably) to the full reinstatement value thereof with sufficient provision also being made for the cost of clearing the site and architects, engineers, surveyors and other professional fees incidental thereto (together with provision for forward inflation) and the loss of income or prospective income for a period of not less than three years. The Borrower shall effect and maintain, or procure that Master Lessee or the subtenants effect and maintain, at all times with a substantial and reputable insurance office or underwriters, insurance against product and third party, and public liability risks. The Borrower shall ensure, at all times, that each Insurance Policy or the relevant certificate of third party interest in the insurances (Sicherungsschein (in respect of fire insurance and other types of insurance customarily covered by such type of instrument), Sicherungsbestätigung or Sicherungsvereinbarung) contains in favour of the Borrower Security Trustee: 88

89 (n) (o) (p) (i) (ii) (iii) a mortgagee clause whereby such Insurance Policy shall not be vitiated or avoided as against a mortgagee or security holder in the event of or as a result of any misrepresentation, act, neglect or failure to make disclosure on the part of the insured party (other than the Finance Parties) or any circumstances beyond the control of any insured party; terms prohibiting the insurer from vitiating or avoiding any Insurance Policy as against a mortgagee in the event of any misrepresentation, act, neglect or failure to make full disclosure on the part of Borrower or any tenant or other insured party and a waiver of all rights of subrogation; and terms providing that it shall not be invalidated so far as the Borrower Security Trustee is concerned for failure to pay any premium due without the insurer first giving to the Borrower Security Trustee not less than 14 days written notice. The Facility Agent may on reasonable notice request the Borrower to provide it with relevant details of any Insurance Policy and may, if the amount insured by, or the risks covered by, any such Insurance Policy do not comply with the Borrower s obligations under this Clause, require the Borrower to increase the amount insured by, and/or amend the category of risks covered by, any such Insurance Policy to such extent and in such manner as are necessary to comply with such obligations and the Borrower shall promptly comply with such request. The Borrower shall: (i) (ii) (iii) (iv) (v) (vi) ensure that there has been given to the Facility Agent such information in connection with the Insurance Policies and copies of the certificates relating to the Insurance Policies as the Facility Agent may at any time reasonably require and shall notify the Facility Agent of any new Insurance Policies, renewals made and material variations or cancellations of Insurance Policies made or, to the knowledge of the Borrower, threatened or pending; no later than five Business Days prior to the expiry of any Insurance Policy, forward to the Facility Agent a copy of the renewal cover note evidencing that a new Insurance Policy is in place; notify the Facility Agent in writing of any material changes to its insurance cover made from time to time; not do or permit anything to be done which may make void or voidable any Insurance Policy; effect and maintain all Insurance Policies with (x) Extremus Versicherungs AG (in the case of Insurance Policies covering terrorism), (y) HDI Industries Versicherung AG or (z) any other substantial and reputable insurance office or firm of underwriters having a long-term credit rating of at least A- from Standard & Poor s, at least A- from Fitch and at least A2 from Moody s; duly and punctually pay all premiums and other monies payable under all Insurance Policies and prior to the expiry of an existing Insurance Policy, produce to the Facility Agent a copy or sufficient extract of every Insurance Policy together with the premium receipts or other evidence of the payment thereof; and (vii) if a Loan Event of Default is continuing, inform the Facility Agent of any claim and any actual or threatened refusal of an insurer or underwriter to pay any such claim. The Borrower shall at all times: (i) ensure that (except as provided in paragraph (l) above or where a certificate of third party interest in favour of, and reasonably satisfactory to, the Borrower Security Trustee has been obtained) each Insurance Policy shall name the Borrower Security Trustee as coinsured and/or as first loss payee and pursuant to the Senior Security Documents shall ensure that the insurer under each Insurance Policy is notified that the insurance proceeds are payable directly to the Borrower Security Trustee; and 89

90 (q) (r) (s) (t) (u) (v) (w) (x) (ii) where any asset is for the time being insured otherwise than in the name of the Borrower Security Trustee cause the interest of the Borrower Security Trustee to be noted or endorsed on the policy or policies of insurance relating thereto unless a certificate of third party interest in favour of, and reasonably satisfactory to, the Borrower Security Trustee has been obtained. If the insurer or underwriter under any Insurance Policy ceases to meet the rating requirements set out in paragraph (o)(v) above, the Borrower shall duly and punctually put in place, or procure that there is put in place, replacement insurances in accordance with the provisions described in paragraphs (k) to (v) with an insurer or underwriter which does meet those rating requirements and is otherwise acceptable to the Facility Agent (acting reasonably) by the date which is the earlier of the expiry of the Insurance Policy and the date falling three months from the insurer or underwriter ceasing to meet the rating requirements set out in paragraph (o)(v) above. If the Borrower does not comply with its obligations in respect of any Insurance Policy, the Facility Agent may (without any obligation to do so and, save where the Borrower has failed to maintain adequate insurance in respect of any Property, on giving 20 Business Days prior notice) effect or renew any such Insurance Policy in its own name and the monies expended by the Facility Agent on so effecting or renewing any such insurance shall be reimbursed by the Borrower to the Facility Agent on demand. Subject to the terms of the Master Lease, all insurance proceeds effected and maintained in accordance with: (i) (ii) (iii) paragraph (k) above to the extent such insurance proceeds relate to business interruption, shall be paid into the Rent Account; and paragraph (k) above, such other insurance proceeds, unless the Insurance Policy provides otherwise, shall be paid into the Sales Account; and paragraph (l) above, shall be paid to the relevant third party. The Facility Agent and the Borrower Security Trustee shall have the right to participate in negotiations and proceedings to settle the amount of insurance proceeds or expropriation proceeds if the amount of such proceeds is reasonably expected by the Facility Agent to exceed A 5,000,000, and Borrower will not permit or suffer the settlement of such proceeds without the prior consent of the Facility Agent (which will not be unreasonably withheld). The Borrower will procure that each casualty insurance policy required hereunder will be to the effect that the insurer is obligated to pay insurance proceeds to the Sales Account for the purpose of either (i) reinstating the affected Property, or (ii) paying the insurance proceeds for the benefit of the Lenders, as provided in The Senior Facility Agreement. Such insurance policies may provide for self-retention or deductible amounts per occurrence not in excess of A 250,000. The Borrower shall notify the Facility Agent promptly if any material part of a Property is expropriated or the applicable governmental agency or authority makes an order for the expropriation of the same. The Borrower shall do the following, or procure that Master Lessee or the subtenants do the following: (i) (ii) repair and keep in good and substantial repair and condition each Property owned by it except where failure to do so would not materially and adversely affect the security over that Property or the value, marketability or use of that Property; promptly, after being required to do so by the Facility Agent, make good any want of repair in each Property owned by it except where failure to do so would not materially and adversely affect the security over that Property or the value, marketability or use of that Property; or 90

91 (iii) promptly implement (and, in any event, within any time period stipulated in any such structural survey) all steps agreed between the Borrower and the Facility Agent (both parties acting reasonably) to be undertaken arising from any recommendation in any structural survey or Report and notify the Facility Agent when all such steps have been implemented fully. (y) The Borrower shall not, at any time, without the prior written consent of the Facility Agent, effect, carry out or permit any demolition, reconstruction or rebuilding of, or any structural alteration to, or material change in the use of, any of its Properties, if any of the foregoing would constitute a Material Alteration. (z) If a Loan Event of Default is continuing, unless the Borrower, Master Lessee or a subtenant is contractually so committed, the Borrower shall not carry out or permit any demolition, reconstruction, rebuilding of, or any structural alteration to, or material change in the use of, any of its Properties, except with the prior consent of the Facility Agent. (aa) The Borrower shall promptly give full particulars to the Facility Agent of any material notice, order, directive, designation, resolution or proposal of which it becomes aware having application to a Property, or to the area in which it is situate by any planning authority or other public body or authority under or by virtue of the planning acts or any other statutory power or powers conferred by any other law, which is reasonably likely to impact adversely a Property that is material in relation to the Properties as a whole. (bb) If, at any time, the Borrower fails to ensure compliance with any such material notice, the Facility Agent may serve written notice on the Borrower specifying that failure and a reasonable period of time during which the Borrower may rectify that failure and after the expiry of that period of time, the Facility Agent may, at the cost of the Borrower, take all reasonable or expedient steps (in the name of the Borrower or otherwise) to ensure compliance with any such material notice or order and may at the cost of the Borrower make such objection or objections or representations against or in respect of any proposal for such a material notice or order as the Facility Agent considers expedient. (cc) The Borrower shall, save in the event they are being contested in good faith, and adequate reserves for their payment are being maintained and punctually pay or cause to be paid and indemnify the Facility Agent within five Business Days of demand against all existing and future rents, fees, renewal fees, charges, assessments, impositions and outgoings whatsoever whether imposed by deed or by statute or otherwise and whether in the nature of capital or revenue which now or at any time during the continuance of the security constituted by or pursuant to The Senior Facility Agreement are payable by the Borrower in respect of its Property or any part thereof. (dd) If, at any time, the Borrower fails to perform any obligation described in this section Property Undertakings, the Facility Agent may serve written notice on the Borrower specifying that failure and a reasonable period of time during which the Borrower may rectify that failure and, after the expiry of that period of time, it shall be lawful for the Facility Agent (without any obligation to do so), to enter upon a Property with or without agents appointed by it, architects, contractors, workmen and others as it may reasonably determine and execute such works and take such steps as may, in the opinion of the Facility Agent, be required to remedy or rectify any such failure. (ee) The fees, costs and expenses incurred by the Facility Agent for such works and taking such steps shall be reimbursed by the Borrower to the Facility Agent within ten Business Days of demand. (ff) The exercise by the Facility Agent of its powers under the provisions summarised in paragraphs (dd) and (ee) above and this paragraph (ff) shall not render any Finance Party liable to account as mortgagee or security holder in possession. (gg) Borrower will ensure that the Managing Agents cause all subtenants (including the Major Subtenants) to pay rent directly into the B Portfolio Rent Account. Each Managing Agent shall provide its services pursuant to agreements with the Master Lessee and/or the Borrower for the benefit of the Lenders (echter Vertrag zugunsten Dritter) on terms acceptable to the Facility 91

92 Agent, and in the case of any management agreement with the Borrower, the rights of the Managing Agent will be subordinated to those of the Finance Parties under the Senior Finance Documents. (hh) The Borrower shall take such action to ensure that the conduct of the Master Lessee is such that the Master Lessee complies with these requirements that would apply under the provisions summarised in paragraphs (a) to (gg) above if such Clauses applied to the Master Lessee rather than Borrower. Loan Events of Default The Senior Facility Agreement contains the following events of default (each a Loan Event of Default): (a) (b) The Borrower does not pay on the due date any amount payable pursuant to a Senior Finance Document at the place and in the currency in which it is expressed to be payable, unless such non-payment is caused by technical or administrative error and is remedied within 3 Business Days of the relevant due date. The Borrower ceases to be a Single Purpose Entity or the Borrower does not comply with: (i) (ii) (iii) (iv) the requirement to provide the applicable documents and other evidence listed in Part D of Schedule 2 of the Senior Facility Agreement; the provisions dealing with the Borrower Accounts summarised in The Structure of the Accounts The Borrower Accounts below; the provisions summarised in paragraphs (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (u), (v), (w), (x) or (y) of General Undertakings above; the provisions summarised in paragraphs (g), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (gg) or (hh) of Property Undertakings above. A failure to comply with the provision summarised in paragraph (hh) will only constitute an Event of Default to the extent noncompliance relates to the provisions summarised in paragraphs (l) to (n), or (q) or (r) of General Undertakings or paragraph (gg) of Property Undertakings ; or create, permit or suffer to exist any Encumbrance and Restriction over any of the Properties (except for Permitted Encumbrances and Restrictions which, taken together with any other such encumbrances in breach of the provisions summarised in paragraphs (d), (e) and (f) of General Undertakings above, in the aggregate, are not reasonably likely to result in a Material Adverse Effect). (c) (d) (e) (f) No Event of Default under paragraph (b) above shall occur if the failure to comply is capable of remedy and is remedied within 10 Business Days of the Facility Agent giving notice to Borrower or Borrower first becoming aware of the failure to comply. The Borrower is in violation of the provisions summarised in paragraphs (c) or (hh) of General Undertakings summarised above. The Borrower or Master Lessee does not comply with any provision of the Senior Finance Documents to which it is a party (other than those referred to in paragraphs (a) to (d) above). No Event of Default under paragraph (e) above shall occur if the failure to comply is capable of remedy and is remedied within 30 Business Days of the Facility Agent giving notice to the Borrower becoming aware of the failure to comply; provided, that, if at the expiry of that 30 Business Day period the failure to comply has not been remedied, the Borrower shall have an additional 30 Business Days to remedy the failure to comply if the Facility Agent is satisfied, acting reasonably, that: (i) it was not reasonably possible to remedy the failure to comply within the initial 30 Business Days; and (ii) the Borrower has, and continues, diligently to attempt to remedy the failure to comply. 92

93 (g) Any representation or statement made or deemed to be made by the Borrower in the Senior Finance Documents to which it is a party or any other document delivered by or on behalf of the Borrower under or in connection with any Senior Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed made unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy, and (ii) are remedied within 30 days of the earlier of the Facility Agent giving the Borrower notice thereof and the Borrower first becoming aware of such misrepresentation. (h) any representation made by KarstadtQuelle AG or any affiliate under the Acquisition Documentation is, to the best of the knowledge of certain named officers of KarstadtQuelle AG and Whitehall 2005, incorrect or misleading in any material respect when made or deemed to be made unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy; and (ii) are remedied within 30 days of the earlier of the Facility Agent giving Borrower notice thereof and the Borrower first becoming aware of such misrepresentation. (i) If the partnership agreement between Equity Holders constituting the Borrower or Master Lessee is modified or amended without the consent of the Facility Agent so as to change the purpose of Borrower or Master Lessee, or the scope of the Borrower s or Master Lessee s authorized activities, in a manner such that the Borrower or Master Lessee would cease to be a Single Purpose Entity, or if the Equity Holders fail, within a reasonable period after request by the Facility Agent, to confirm the absence of such modifications or amendments. (j) The Borrower or Master Lessee: (i) is, or is deemed for the purposes of any law to be, unable to pay its debts as they fall due (zahlungsunfähig or as otherwise defined in section 1 of the Dutch Insolvency Act (Faillissementswet)), overindebted (überschuldet) or to be otherwise insolvent; (ii) the managing directors (Geschäftsführer) of the Borrower or Master Lessee are required by law to file for insolvency; (iii) admits its inability to pay its debts as they fall due; (iv) suspends making payments on all or a material part of its debts or announces an intention to do so; or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more classes of its creditors (other than the Finance Parties and the Mezzanine Finance Parties in their capacity as such) with a view to rescheduling any of its indebtedness; or (v) by reason of actual or anticipated financial difficulties, begins negotiations with all or any class of its creditors for the rescheduling of any of its indebtedness. (k) Any of the following occurs in respect of the Borrower or Master Lessee: (i) Borrower or Master Lessee files for insolvency (Antrag auf Eröffnung eines Insolvenzverfahrens); (ii) any step is taken with a view to moratorium or a composition, assignment or similar arrangement with all or any class of its creditors (other than a step which is frivolous or vexatious and an abuse of process); (iii) its shareholders have passed any resolution for, to petition for or to file documents with a court for, its winding-up, administration, dissolution or liquidation or any such resolution is passed; (iv) any person presents a petition, or files documents with a court, for the opening of insolvency proceedings (Insolvenzeröffnungsantrag), its winding-up, administration, dissolution or liquidation (other than a petition or application which the Facility Agent is satisfied is vexatious or frivolous and which is discharged within 21 days); 93

94 (l) (m) (n) (o) (p) (v) a court order for commencement of insolvency proceedings (Insolvenzeröffnungsbeschluss) or for rejection of insolvency proceedings due to lack of fund (Abweisungsbeschluss mangels Masse) is made; (vi) an order for its winding-up, administration or dissolution is made; (vii) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, insolvency administrator (Insolvenzverwalter), interim insolvency administrator (Vorläufiger Insolvenzverwalter), custodian (Sachwalter) or similar officer is appointed in respect of it or any of its assets; (viii) its directors, shareholders or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, insolvency administrator (Insolvenzverwalter), interim insolvency administrator (Vorläufiger Insolvenzverwalter), custodian (Sachwalter) or similar officer is appointed in respect of it or any of its assets; or (ix) any other analogous step or procedure is taken in any jurisdiction. Any of the following occurs in respect of the Borrower or Master Lessee: (i) a suspension of payments (surséance van betaling) is declared in respect of any indebtedness of the Borrower or Master Lessee; or (ii) the Borrower or Master Lessee is subject to a filing for insolvency under the Dutch Insolvency Act, other than any filing that is vexatious or frivolous and that is discharged, stayed or dismissed within eight weeks following the filing of the petition for reasons other than insufficiency of the estate. Other than a filing referred to in paragraph (l)(2) above, any corporate action, legal proceedings or other formal procedure or step is taken, or out of court notice given, with respect to the Borrower or Master Lessee in relation to: (i) the suspension of payments, a moratorium of any indebtedness, bankruptcy, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of, or the appointment of an administrator to, Borrower or Master Lessee; or (ii) a composition, assignment or arrangement with any creditors of the Borrower or Master Lessee; or (iii) the appointment of a provisional liquidator, a liquidator (other than a petition or application which the Facility Agent is satisfied is vexatious or frivolous and which is discharged within 21 days), receiver, receiver or manager, administrative receiver, administrator, compulsory or interim manager or other similar officer in respect of Borrower, Master Lessee or any of their respective assets (other than movable goods and equipment not necessary for the operation of the Borrower or Master s business, in each case taken as a whole), (iv) the Borrower or Master Lessee giving notice under section 36(2) of the Dutch 1990 Tax Collection Act (Invorderingswet 1990) or section 16d(2) of the Dutch Social Insurance Coordination Act (Coördinatiewet Sociale Verzekeringen), (v) or any analogous procedure or step is taken in any jurisdiction. Any attachment, sequestration, distress, inhibition, arrestment or other form of diligence distress or execution affects any Property or any other asset of Borrower or Master Lessee having a value of at least A 5,000,000, and such is not removed or discharged within 14 days from when it commences. The Borrower ceases, or threatens to cease, to carry on a substantial part of its business and such cessation would be reasonably likely to have a Material Adverse Effect. It is or becomes unlawful for the Borrower to perform any of its obligations under the Senior Finance Documents. 94

95 (q) (r) (s) Any Senior Finance Document is not binding on or enforceable against any party (other than a Finance Party) or effective to create any material security to be created by it. A Major Sub-Tenant is in default of payment of rent in an amount equal to at least two months rent under the applicable Permitted Sublease (Sublease Default), and such default continues for a period of at least six consecutive months, or for at least six months within any period of twelve consecutive months. After the Parent Lease Guarantee relating to the Permitted Sublease for a Major Sub-Tenant is no longer in effect, the Major Sub-Tenant will not make any distribution or advance to or for the benefit of its direct or indirect equity holders for a period of 6 months. Acceleration of the Loan and enforcement of the related security If a Loan Event of Default has occurred and is outstanding, the Facility Agent or the Borrower Security Trustee may, and must if so instructed by the Majority Lenders by notice to the Borrower cancel the Total Commitments; declare that all or part of the Loan, together with accrued interest and all other amounts accrued or outstanding under the Senior Finance Documents are immediately due and payable; direct the Borrower Security Trustee to take any step to enforce any security; and/ or take any step to enforce any security, or revise any rights of the Finance Parties under the Senior Finance Documents. 95

96 THE STRUCTURE OF THE BORROWER ACCOUNTS The Accounts of the Borrower The Senior Facility Agreement contemplates that the Borrower will maintain the Rent Account, the B Portfolio Rent Account, the B Portfolio Maintenance Capex Account, the Junior Reserve Account, the Sales Account, the B Portfolio Deferred Capex Account and the General Account (each a Borrower Account and together the Borrower Accounts). Under the Senior Facility Agreement, the Borrower must cause the Master Lessee to open and maintain the B Portfolio Maintenance Capex Account and the B Portfolio Deferred Capex Account in the name of the Master Lessee. The Borrower may cause the Master Lessee to maintain the other Borrower Accounts in the Master Lessee s name, or the Borrower may maintain those accounts in its own name. As of the date of this Prospectus, each Borrower Account is held with Commerzbank Aktiengesellschaft. The Senior Facility Agreement provides that the Borrower Accounts shall be opened and maintained at a bank selected by the Borrower and reasonably satisfactory to the Facility Agent with a credit rating at all times of at least A-1+ from Standard & Poor s, at least F1+ from Fitch and at least P1 from Moody s (or as otherwise agreed by the Facility Agent which agrees to that appointment, as the case may be) (the Account Bank). The Borrower shall take all necessary steps to designate as Account Bank a new bank that meets such ratings requirements no later than 30 days after it becomes aware that the Account Bank does not satisfy such ratings requirements. Either the Borrower or the Facility Agent may request a change of the designated branch of the Account Bank to another branch, subject to the consent of the Borrower or the Facility Agent, as applicable. A party receiving such a request shall not unreasonably withhold or delay (as soon as practicable after the requirement or request) their consent. Pursuant to the Borrower Account Pledge Agreements and the Borrower and Master Lessee Account Pledge Agreements, the Borrower and the Master Lessee (where relevant) have pledged as security in favour of the Borrower Security Trustee the present and future credit balance of each of the Borrower Accounts, including all interest payable thereon, together with all ancillary rights and claims associated with such accounts. B Portfolio Rent Account Pursuant to the Senior Facility Agreement, the Borrower must ensure that all Gross Revenue (which would include rent under the Master Lease) is promptly paid into the B Portfolio Rent Account. The Borrower must also cause the Master Lessee to instruct the Major Subtenants to pay amounts due by them under a Permitted Sublease into the B Portfolio Rent Account. The Facility Agent will have sole signing authority on the B Portfolio Rent Account and shall disburse amounts deposited in that account in any Loan Interest Period as follows: (a) firstly, an amount not exceeding the Quarterly Capex Instalment for the relevant Loan Interest Period will be paid into the B Portfolio Capex Maintenance Account; and (b) secondly, remaining amounts will be paid into the Rent Account. Rent Account On each Loan Payment Date (unless a payment Loan Default or Loan Event of Default is then continuing), the amount on deposit in the Rent Account will be disbursed as follows: (a) firstly, to pay any rent under Ground Leases due during the Loan Interest Period then commencing (such amounts will be disbursed to the General Account, and the Borrower agrees to use these funds timely to pay such rent); (b) secondly, to pay amounts (if any) due the counterparty under each Hedge Document to the extent hedging interest rate exposure under the Senior Facility Agreement, except to the extent due to a breach, insolvency or downgrade of the Counterparty thereto; (c) thirdly, to pay any unpaid costs, fees and expenses due to the administrative parties under the Senior Finance Documents; 96

97 (d) (e) (f) (g) (h) (i) (j) (k) (l) fourthly, to pay costs of the Borrower (both those theretofore incurred and those expected to be incurred during the Interest Period then commencing) not defrayed by the Master Lessee or any subtenant of the Properties, as to which Borrower notifies the Facility Agent at least 6 Business Days prior to such Loan Payment Date, provided that the aggregate amount disbursed for this purpose on any Loan Payment Date will not exceed 2 per cent. of the Gross Revenue then on deposit in the Rent Account (such amounts will be disbursed to the General Account, and the Borrower agrees promptly to use such funds to pay such costs); fifthly, to pay all accrued interest, costs, fees and expenses (including any amount representing VAT chargeable in respect of the same) due and payable to the Lender under the Senior Finance Documents (including the Retained Interest to the Retained Interest Holder); sixthly, to pay the relevant Amortisation Instalment and any other principal then due in respect of the Loan; seventhly, to the extent not covered by (b) above, to pay amounts (if any) due the Counterparty under each Hedge Document to the extent hedging interest rate exposure under the Loan; eighthly, to the administrative agent under the Mezzanine Facility Agreement to pay unpaid costs, fees and expenses due to the administrative parties under the Mezzanine Facility Agreement; ninthly, to the administrative agent under the Mezzanine Facility Agreement to pay all accrued interest, costs, fees and expenses (including any amount representing VAT chargeable in respect of the same) due and payable to the Orignator under the Mezzanine Finance Documents; tenthly, to the administrative agent under the Mezzanine Facility Agreement in the amount of all principal then due in respect of the Mezzanine Facility Agreement; eleventh, fees due to the Managing Agent by the Borrower under an Asset Management Services Agreement; and twelfth, to the General Account (for, as the case may be, use by the Borrower or distribution to the Parent and its equityholders); In the event that a Cash Trap Period (but no payment Loan Default or Loan Event of Default) is then continuing, Allocated Mezzanine Interest for the period most recently ended (but no other amounts) will be paid to the mezzanine administrative agent and any amounts referred to in paragraph (l) (that would otherwise be paid into the General Account) will be retained in the Rent Account. If a payment Loan Default or Loan Event of Default is continuing, the amounts referred to in paragraphs (g) to (l) will be retained in the Rent Account rather than be paid out. B Portfolio Maintenance Capex Account The Borrower shall withdraw or shall cause the Master Lessee to withdraw, as applicable, amounts from the B Portfolio Maintenance Capex Account from time to time solely to the extent amounts are needed by the Borrower or the Master Lessee, as applicable, in order to: (a) (b) (c) (d) fund capital expenditures to the Properties permitted to be incurred under the Senior Finance Documents that are consistent with the budget as updated from time to time with the reasonable approval of Facility Agent; pay fees under the Facilities Management Services Agreement with the Master Lessee in an amount not to exceed A136,871 in any Loan Interest Period; pay fees to the Managing Agent under the Asset Management Services Agreement with the Master Lessee in an amount not to exceed A27,442 in any Loan Interest Period; and pay taxes incurred by the Master Lessee related to the Properties, provided, that while a Cash Trap Period, payment Loan Default or Loan Event of Default is continuing, no amount will be disbursed from the B Portfolio Maintenance Capex Account unless approved by the Facility Agent. 97

98 Sales Account The Borrower must ensure that all Net Disposal Proceeds (in respect of the Disposal of any interest in a Property) are promptly paid into the Sales Account for disbursement by the Facility Agent. On each date on which a Disposal of a Property occurs, or on the Loan Payment Date falling next thereafter, as the Borrower may elect by written notice delivered to the Facility Agent (or, if paragraph (d) below applies, upon the Facility Agent determining that a payment Loan Default or a Loan Event of Default is not continuing), the Facility Agent shall withdraw such amount standing to the credit of the Sales Account as it may determine (acting reasonably) for application in or towards (and in the order of) the following: (a) firstly, payment of swap breakage costs (if any) then outstanding; (b) secondly, all interest and other costs, fees and expenses (including any amount representing VAT chargeable in respect of the same) due and payable to the Lender under the Senior Facility Agreement in respect of a prepayment; (c) thirdly, the amount of prepayment of the Loan required under the Senior Facility Agreement; and (d) fourthly, if the Facility Agent determines (acting reasonably) that neither a payment Loan Default nor a Loan Event of Default is then continuing, any surplus: (i) if no Cash Trap Period is continuing: (A) an amount equal to the Mezzanine Release Amount, plus accrued interest and Mandatory Cost, if any, in respect of the Mezzanine Facility Agreement up to the date of the associated payment under this subclause, and any other interest, costs, fees and expenses (including without limitation any Break Costs and associated hedging break costs) then due and payable in respect of Mezzanine Facility Agreement, (the foregoing amounts to be certified by the Mezzanine Administrative Facility Agent) will be paid directly by the Facility Agent to the Mezzanine Administrative Facility Agent; and (B) the balance will be paid into the General Account (for, as the case may be, use by the Borrower or distribution to the Parent or its equityholders); (ii) if a Cash Trap Period is continuing, an aggregate amount equal to the Mezzanine Release Amount, plus accrued interest and Mandatory Cost, if any, in respect of the Mezzanine Facility Agreement up to the date of the associated payment under this subclause, and any other interest, costs, fees and expenses (including without limitation any Break Costs and associated hedging break costs) then due and payable in respect of Mezzanine Facility Agreement, (the foregoing amounts to be certified by the Mezzanine Administrative Facility Agent), will be transferred to the Junior Reserve Account and the balance will be transferred to the Rent Account. Note, however, that if the Disposal consists of damage or destruction of any Property funds may be withheld until insurance claims are pursued and damage or destruction has otherwise been restored. Special Release of Funds On the Loan Payment Date immediately following the termination of a Cash Trap Period, and provided no payment Loan Default or Loan Event of Default is then continuing, all amounts then on deposit in the Junior Reserve Account will be paid to the Mezzanine Facility Agent, and, for the avoidance of doubt, excess amounts on deposit in the Rent Account will be paid to the General Account. While a Cash Trap Period is continuing, amounts may be released to the General Account from the Junior Reserve Account, subject in each case to the consent of both (i) the Majority Lenders and (ii) Mezzanine Finance Parties holding at least 66-? per cent. of the then outstanding principal balance of the Mezzanine Facility. While a Cash Trap Period is continuing, amounts may be released to the General Account from the Rent Account subject to the consent of the Facility Agent from time to time. 98

99 B Portfolio Deferred Capex Account In the event that by the first anniversary of the First Utilisation Date the completion of the Deferred Capex Programme requires investments by the Major Subtenants that exceed A4,095,000 (the Remaining Deferred Capex Investments), then, within 10 Business Days, following the first anniversary of the First Utilisation Date, the Borrower shall cause the Master Lessee to cause Karstadt Warenhaus GmbH to deposit in the B Portfolio Deferred Capex Account an amount equal to the difference between A4,095,000 and the Remaining Deferred Capex Investments. So long as no Cash Trap Period, payment Loan Default or Loan Event of Default is continuing the Master Lessee may withdraw such amounts from the B Portfolio Deferred Capex Account from time to time to reimburse Karstadt Warenhaus GmbH for expenses actually incurred by it to complete expenses required to be made prior to the first anniversary of the First Utilisation Date under the Deferred Capex Programme). 99

100 DESCRIPTION OF THE MEZZANINE FACILITY AGREEMENT AND INTERCREDITOR ARRANGEMENTS The Mezzanine Facility Agreement Pursuant to an amended and restated mezzanine facility agreement dated 30 June 2006, as further amended by an amendment agreement dated 5 September 2006 (as amended and restated, the Mezzanine Facility Agreement) among Highstreet Holding GbR, as mezzanine borrower (the Mezzanine Borrower), Highstreet A (and together with the Borrower, the Mezzanine Facility Guarantors), Goldman Sachs Credit Partners L.P., as the original mezzanine lender (the Original Mezzanine Lender), Goldman Sachs International, as the arranger of the Mezzanine Loan (the Mezzanine Loan Arranger), the Facility Agent, the Borrower Security Trustee and the other lenders named therein, the Original Mezzanine Lender advanced to the Mezzanine Borrower a loan in the amount of A1,465,673,480 (with an available facility of up to A1,470,200,750 by 31 August 2006) of which A416,842,345 was allocated to the 109 Properties. As at the Issue Date, A415,607,676 is expected to be allocated to the 109 Properties after the scheduled amortisation due on 20 October The Mezzanine Facility Agreement is governed by German law and amends and restates the mezzanine facility agreement dated 27 March 2006 among the parties to the Mezzanine Facility Agreement. The proceeds of the Mezzanine Loan were applied by the Mezzanine Borrower in or towards the financing (or refinancing) of (a) the costs of acquisition of the Properties and the Portfolio A Properties by the Mezzanine Facility Guarantors (including the costs of acquisition of the leasehold interests in the Ground-Leased Properties (as identified in the Mezzanine Facility Agreement)); (b) the payment of fees, costs and expenses incurred by the Mezzanine Loan Borrower, the Mezzanine Facility Guarantors and the Equity Holders in connection with the transactions contemplated by the Mezzanine Facility Agreement (including, without limitation, financing fees, professional fees, legal costs, hedging costs, real estate transfer taxes and registration fees); and (c) funding capital expenditures of the Mezzanine Facility Guarantors required under the Master Leases. Subject as set forth below, each Mezzanine Facility Guarantor irrevocably and unconditionally and jointly and severally: (a) guarantees to each Mezzanine Finance Party the punctual performance by the Mezzanine Borrower of all the Mezzanine Borrower s obligations under the Mezzanine Finance Documents; (b) undertakes with each Mezzanine Finance Party that whenever the Mezzanine Borrower does not pay any amount when due under or in connection with any Mezzanine Finance Document, that Mezzanine Facility Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and (c) indemnifies each Mezzanine Finance Party immediately on demand against any cost, loss or liability suffered by that Mezzanine Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Mezzanine Finance Party would otherwise have been entitled to recover. Notwithstanding the foregoing, the obligations of each Mezzanine Facility Guarantor shall be limited as follows: (a) the amount guaranteed by each Mezzanine Facility Guarantor at any time shall be limited to and not exceed the sum of the sum of the Allocated Loans Amounts corresponding to the Properties or Portfolio A Properties, as applicable, held by such Mezzanine Facility Guarantor; and (b) for as long as any obligations are outstanding to a Finance Party under the Senior Facility Agreement or a finance part under the Senior A Facility Agreement (the Senior A Finance Parties), no amounts will be due and payable by such Mezzanine Facility Guarantor under such guarantee until the Finance Parties under the Senior Facility Agreement or the Senior A Finance Parties under the Senior A Facility Agreement, as applicable, shall have taken enforcement action against such Mezzanine Facility Guarantor by way of (i) acceleration of amounts due and outstanding under the Senior Facility Agreement or the Senior A Facility 100

101 Agreement, as applicable, or (ii) enforcement of any remedies against any assets of such Mezzanine Facility Guarantor over which such Finance Parties or the Senior A Finance Parties, as applicable, have or are the beneficiaries of, security. The Loan Intercreditor Agreement is governed by English law. The Mezzanine Loan will not be assigned to the Issuer. The Intercreditor Arrangements On 6 September 2006, the Borrower Security Trustee, the Facility Agent on behalf of the Finance Parties (in such capacity, the Senior Facility Agent) and on behalf of the Mezzanine Finance Parties (in such capacity, the Mezzanine Facility Agent), the Originator and the Original Mezzanine Lender, among others, entered into an intercreditor agreement (the Loan Intercreditor Agreement) with respect to the relative rights of the Finance Parties and each of the Mezzanine Finance Parties (including the Borrower Security Trustee under the Mezzanine Finance Documents) to (a) direct the Borrower Security Trustee as to enforcement of the security created by the Common Security Agreements (the Common Security), (b) receive payments under the Senior Finance Documents and the Mezzanine Finance Documents (other than the respective fee letters relating thereto), and (c) receive the proceeds of enforcement by the Borrower Security Trustee of the Common Security. The Loan Intercreditor Agreement was amended on or about 21 September As used in this section The Intercreditor Arrangements : (a) The term Senior A Facility Agreement means the credit agreement dated on or about 27 March 2006 between Highstreet A, as borrower, and Karstadt Hypothekenbank, as lender; and (b) Mezzanine Security Agreements means (other than in respect of the Independent Mezzanine Security): (i) first- or second-ranking uncertificated land charges over the Properties and the Portfolio A Properties; (ii) the Common Security; and (iii) certain other pledges and security assignments, all as more specifically described in the Mezzanine Facility Agreement. Independent Mezzanine Security means (a) the pledges of the interests in the Mezzanine Borrower, and (ii) any other collateral given by the Mezzanine Borrower, Highstreet A or any other entity as security for the Mezzanine Loan pursuant to the Mezzanine Finance Documents but not given as security for the amounts due under the Senior Finance Documents. The proceeds of enforcement of the Common Security will be applied first to the payment of all Senior Secured Obligations then due until paid in full and second to the payment of all Mezzanine Secured Obligations then due until paid in full. The proceeds of enforcement of such security shall be for the sole account and benefit of the Mezzanine Finance Parties and such enforcement shall not in and of itself constitute a default or a Loan Event of Default. Payment Subordination Except for any Mezzanine Permitted Payments, the Mezzanine Finance Parties rights to payment of any amount due by the Borrower are subordinated to the Finance Parties rights to payment by the Borrower of the amounts due under the Senior Finance Documents, and, except for any Mezzanine Permitted Payments, each Mezzanine Finance Party shall not accept or receive payments from the Borrower prior to the end of the period beginning on the date of the Loan Intercreditor Agreement and ending on the date on which all amounts due under the Senior Finance Documents have been irrevocably paid or discharged in full and all commitments of the Finance Parties have been cancelled or reduced to zero (the Priority Period). Mezzanine Permitted Payment means any payment made by the Borrower to or for the account of any Mezzanine Finance Party, provided that (a) no Loan Default by the Borrower consisting of the failure to pay any amount due to a Lender under the Senior Finance Documents (a Senior Payment Default) and no Loan Event of Default is then continuing, and (b) while a Cash Trap Period is in effect under the Senior Facility Agreement, only payments of Allocated Mezzanine Interest will be 101

102 permitted as provided in the Senior Facility Agreement and as set forth below (but only if no Senior Payment Default or Loan Event of Default is then continuing). Mezzanine Secured Obligations means all present and future obligations and liabilities (whether actual or contingent, and whether owed jointly, severally or in any other capacity whatsoever) in respect of which, and only to the extent that, the Borrower has granted security pursuant to the Common Security Agreements. Senior Secured Obligations means present and future obligations and liabilities (whether actual or contingent, whether owed jointly, severally or in any other capacity whatsoever and whether originally incurred by the Borrower or by some other person) of the Borrower to the Finance Parties (or any of them) under the Senior Finance Documents. While a Cash Trap Period but no Senior Payment Default or Loan Event of Default is continuing, the Senior Facility Agent shall pay, from and to the extent of amounts then on deposit in the Rent Account, regularly scheduled interest in respect of the Mezzanine Loan in an amount equal to the Allocated Mezzanine Interest. While a Cash Trap Period, Senior Payment Default or Loan Event of Default is continuing, (a) the Senior Facility Agent will not release any amounts from the B Portfolio Maintenance Capex Account, except in certain circumstances and otherwise with the prior consent, or (if a Cash Trap Period but no Senior Payment Default or Loan Event of Default is continuing) upon the direction, of the Mezzanine Facility Agent, and (b) the Senior Facility Agent will not release any amounts from the Rent Account to the General Account except with the prior consent of the Mezzanine Facility Agent. If any insolvency-related proceedings in respect of the Borrower or the Mezzanine Borrower as described in the Loan Intercreditor Agreement shall have occurred and be continuing or a Senior Payment Default or a Loan Event of Default is continuing, then the Finance Parties shall be entitled to receive payment and performance in full of all amounts due or to become due to Finance Parties before any Mezzanine Finance Party is entitled to receive any payment from the Borrower on account of the Mezzanine Loan. The terms of the Loan Intercreditor Agreement do not prohibit, limit or otherwise affect the right of the Mezzanine Finance Parties to receive or retain amounts from, or to enforce on the assets of, Highstreet A pursuant to the Mezzanine Finance Documents, whether or not a Cash Trap Period, Senior Payment Default or Loan Event of Default is then continuing. Cure Rights The Mezzanine Lender has a limited right (but not an obligation) to cure certain events of default under the Loan in accordance with the terms of the Loan Intercreditor Agreement. In the case of consecutive Senior Payment Defaults, the Mezzanine Lender shall not have the right to cure for a period of more than two consecutive quarters and, in the case of non-consecutive Senior Payment Defaults, the Mezzanine Lender shall not have the right to cure more than, in aggregate, six such Senior Payment Defaults from the date of the Loan Intercreditor Agreement. Purchase Option Pursuant to the Loan Intercreditor Agreement, the Mezzanine Lender has the right to purchase the Loan, in whole but not in part, for an amount equal to the outstanding principal balance of the Loan inclusive of all accrued interest (inclusive of the Loan Margin and Mandatory Costs (if applicable)) and other amounts payable at that time under the Senior Finance Documents (but excluding (x) any default interest and (y) all prepayment premiums) and inclusive of all costs and expenses (including reasonable out-of-pocket legal fees and expenses) incurred by the Finance Parties in enforcing the terms of the Senior Finance Documents or recovering the Loan to the extent, under the Senior Finance Documents, that the Borrower is obligated to pay such costs and expenses (the Loan Purchase Price) if (a) the Loan has been accelerated, (b) any Enforcement Action has been commenced and is continuing under the Senior Finance Documents, (c) a Senior Payment Default has occurred in an amount (for all then pending Senior Payment Defaults) in excess of A1,000,000, (d) the Borrower is in default under certain provisions of the Senior Facility Agreement or (e) certain specified Loan Event of Defaults (including relating to insolvency) have occurred (each of the foregoing, a Level 1 Senior Purchase Event). 102

103 If a Loan Event of Default or an event of default under and as defined in the Mezzanine Facility Agreement is continuing in circumstance where a Level 1 Senior Purchase Event has not occurred, then the Mezzanine Lender has the right to purchase the Loan, in whole but not in part, for the Loan Purchase Price plus the prepayment premium (if any) that would apply pursuant to the prepayment fee letter entered into in connection with the Loan if the Loan was then prepaid in full. Events of Default The Finance Parties and the Mezzanine Finance Parties agree that no event of default under the Mezzanine Facility Agreement shall, in and of itself, constitute a Loan Event of Default or entitle any Finance Party to accelerate payments under the Senior Finance Documents or entitle any Finance Party to modify any provision of the Senior Finance Documents, unless the circumstances giving rise to such event of default are circumstances which are separately specified in any Senior Finance Document as giving rise to a Loan Event of Default. Exercise by any Mezzanine Finance Party of any enforcement rights permitted by the Loan Intercreditor Agreement does not constitute (a) an event entitling the Lenders to cancel the Senior Facility Agreement and declare the Loan due pursuant to the mandatory prepayment or acceleration provisions of the Senior Facility Agreement, or (b) a Loan Event of Default, unless the circumstances giving rise to an event of default under the Mezzanine Facility are circumstances which are separately specified in any Senior Finance Document as giving rise to a Loan Event of Default. Undertakings Save as permitted under the Loan Intercreditor Agreement, each Finance Party agreed that it will not, without the prior written consent of the Mezzanine Facility Agent (a) other than in accordance with the Loan Intercreditor Agreement, assign, transfer or otherwise dispose of, or make demand, in each case to or on the Borrower for all or any of the Senior Secured Obligations, or (b) permit to subsist or receive any guarantee or other assurance from the Borrower against loss in respect of any of the Senior Secured Obligations except as provided under the Senior Finance Documents. Enforcement Save as permitted under the Loan Intercreditor Agreement, no Mezzanine Finance Party shall, without the prior written consent of the Senior Facility Agent: (a) enforce or request the Borrower Security Trustee to enforce any Mezzanine Security Agreement over all or any of the assets of the Borrower including by sale, possession, appointment of a receiver or otherwise, (b) accelerate or declare payable upon demand any of the Mezzanine Secured Obligations (or any guarantee given by the Borrower thereof or covenant by the Borrower to pay any such obligation) or otherwise declare any of the Mezzanine Secured Obligations prematurely payable by the Borrower at any time (provided that nothing therein shall limit the rights of the Mezzanine Finance Parties to accelerate or declare payable upon demand or enforce the Mezzanine Secured Obligations owed by the Mezzanine Borrower itself or any other entity that is not the Borrower or otherwise declare any Mezzanine Secured Obligations prematurely payable by the Mezzanine Borrower itself or any other entity that is not the Borrower), (c) initiate or support the taking of any steps to cause any insolvency, liquidation, reorganization, administration or dissolution proceedings or any voluntary arrangement or assignment for the benefit of creditors or any similar proceedings involving the Borrower, whether by petition, convening a meeting, voting for a resolution or otherwise, (d) otherwise exercise any remedy for the recovery of any of the Mezzanine Secured Obligations against the Borrower under any Mezzanine Finance Document, or (e) take or permit to be taken, any action or step to commence or continue any proceedings against the Borrower; provided that nothing in the Loan Intercreditor Agreement shall limit in any way the rights of any Mezzanine Finance Party in respect of the Independent Mezzanine Security. If the Borrower Security Trustee enforces any security created under the Senior Security Documents in accordance with the provisions of the Loan Intercreditor Agreement then, unless the Borrower Security Trustee otherwise agrees in writing: 103

104 (a) no Mezzanine Finance Party (other than the Borrower Security Trustee) will be entitled to take or have possession of, or cause to be taken or possessed, any assets subject to the security or appoint or maintain a receiver, or act as chargee or mortgagee in possession, in respect of such assets, and (b) the Borrower Security Trustee will have the entire conduct of any sale or disposal of assets covered by the security created under the Senior Security Documents. During the Priority Period, subject as described below under Special Rights, (a) no Mezzanine Finance Party shall be entitled to take enforcement action in respect of any Common Security, and (b) the Borrower Security Trustee, where acting on the instructions of the Finance Parties may refrain, defer or cease (whether temporarily or permanently) from enforcing the security created under the Senior Security Documents over an asset as it sees fit, subject to any restrictions set forth in the Senior Finance Documents. The Mezzanine Finance Parties (other than the Borrower Security Trustee), through enforcement of the Independent Mezzanine Security so as to control the Mezzanine Borrower, may: (a) remove one or more directors from, and/or appoint one or more new directors to, the Mezzanine Borrower and/ or the Borrower, and/or (b) otherwise exercise control over the Mezzanine Borrower and/or the Borrower and, for example, thereby exercise any rights of the Borrower to dispose of assets in accordance with the Senior Facility Agreement. Modifications and Amendments The Finance Parties have the right without the consent of the Mezzanine Finance Parties to enter into any amendment, supplement or waiver of the Senior Finance Documents in accordance with the terms thereof, but only if such amendment, supplement or waiver shall not: (a) increase the interest rate or principal amount of the Loan, (b) increase in any other material respect any monetary obligations of the Borrower, (c) shorten the scheduled maturity date of the Loan (other than by any step or action taken by a Finance Party or any receiver or administrator appointed by the Senior Facility Agent or the Borrower Security Trustee under or in relation to the Senior Finance Documents, to enforce any Common Security or any action taken by the Senior Facility Agent or the Borrower Security Trustee in accordance with the acceleration provisions of the Senior Facility Agreement (an Enforcement Action)), or change the amortization provisions under the Loan, (d) amend or modify the provisions of the Senior Finance Documents limiting transfers of interests in the Loan, (e) modify, amend, or waive the terms and provisions of the Senior Facility Agreement relating to the Borrower s Accounts with respect to the amount, manner, timing and method of the application or order of priority of payments required under the Senior Finance Documents, (f) provide for any contingent interest, additional interest or so-called kicker measured on the basis of the performance of the Borrower (or other similar equity participation), (g) extend the period during which voluntary prepayments are prohibited or during which prepayments require the payment of a prepayment fee, or impose any prepayment fee in connection with a prepayment of the Loan or after the maturity date of the Loan, other than as provided in the Senior Facility Agreement on the date hereof, or increase the amount of any such prepayment fee, (h) modify the provisions of the Senior Finance Documents relating to the establishment of reserve accounts and the amounts to be deposited into such accounts, (i) modify the Loan Event of Default provisions of the Senior Facility Agreement, (j) modify any provisions relating to Release Amounts, Allocated Loan Amounts or mandatory prepayments or the application of net proceeds upon the disposition of assets, (k) modify the provisions of the Senior Finance Documents relating to the blocking or trapping of cash or the release of cash from blocked or trapped accounts, or modify the disposal undertakings of the Mezzanine Facility Agreement, or 104

105 (l) expand the security for the Senior Secured Obligations or release any such security except in accordance with the provisions of the Senior Facility Agreement as currently in effect. Amendments, waivers and/or supplements with respect to the matters described in subclauses (a), (b), (c), (f) or (j) above will be permitted only with the consent of all the Mezzanine Lenders. Amendments, waivers and/or supplements with respect to the matters described in the preceding subclauses (d), (e), (g), (h), (i), (k) or (l) will be permitted only with the consent of Mezzanine Lenders then holding at least 66-2/3 per cent. of the outstanding principal amount of the Mezzanine Loan. Special Rights While certain Loan Defaults and/or Loan Events of Default are continuing, if the Borrower Security Trustee does not actively take and pursue Enforcement Action so as to enforce the Common Security within 120 days after the occurrence of such default, then the Mezzanine Lender has the right to direct the Borrower Security Trustee promptly to take Enforcement Action so as to realise any or all of the Common Security on arms length terms free and clear of any security in respect of the Senior Finance Documents and the Mezzanine Finance Documents, provided, that the Borrower Security Trustee shall not be under any obligation to take such Enforcement Action unless it is reasonably satisfied that the net proceeds resulting from such Enforcement Action will be sufficient to pay and discharge unconditionally and irrevocably all Senior Secured Obligations (other than default interest, and other than any prepayment premiums then applicable under the Senior Facility Agreement). While certain other Loan Events of Default are continuing, the Mezzanine Facility Agent has the right to direct the Borrower Security Trustee promptly to take Enforcement Action so as to realise any or all of the Common Security on arms length terms free and clear of any security in respect of the Senior Finance Documents and the Mezzanine Finance Documents, provided that the Borrower Security Trustee shall not be under any obligation to take such Enforcement Action unless it is reasonably satisfied that the net proceeds resulting from such Enforcement Action will be sufficient to pay and discharge unconditionally and irrevocably all Senior Secured Obligations (other than default interest, but inclusive of any prepayment premiums then applicable under the Senior Facility Agreement). The Borrower Security Trustee will not, during the 30-day period following certain Loan Events of Default and during the 150-day period following certain other Loan Events of Default take any Enforcement Action in respect of the Common Security without the prior approval of the Mezzanine Facility Agent. The parties to the Loan Intercreditor Agreement agree to appoint and maintain a joint security trustee until the obligations under and in connection with the Senior Finance Documents or the Mezzanine Finance Documents of either the Finance Parties or the Mezzanine Finance Parties, as applicable, have been discharged in full. The Joint Security Trust Agreement Pursuant to the Joint Security Trust Agreement, the Borrower Security Trustee agrees to: (a) hold and administer any collateral which is security assigned (Sicherungseigentum/ Sicherungsabtretung) or otherwise transferred under a non-accessory security right (nicht akzessorische Sicherheit) to it as security trustee for the benefit of the relevant parties; (b) (c) administer any collateral which is pledged (Verpfändung) or otherwise transferred to a relevant party under an accessory security interest (akzessorische Sicherheit) as agent; and act in relation to the collateral in accordance with the terms of the Joint Security Trust Agreement, the Senior Facility Agreement, the Mezzanine Facility Agreement, the Loan Intercreditor Agreement and the German Loan Security Documents. The parties also confirm the appointment of the Borrower Security Trustee as a German law security trustee (Treuhänder) for the other parties. Each of the other parties authorises the Borrower Security Trustee, subject to the Loan Intercreditor Agreement: 105

106 (a) to exercise such rights, remedies, powers and discretions as are specifically delegated to or conferred upon the Borrower Security Trustee under the German Loan Security Documents together with such powers and discretions as are reasonably incidental thereto, in particular to realise and enforce the German Loan Security Documents and the security granted thereunder, and make and receive all declarations and statements which are necessary or desirable in connection therewith; (b) to take such action on its behalf as may from time to time be authorised under or in accordance with the German Loan Security Documents; and (c) to accept as representative (Stellvertreter) in connection with the German Loan Security Documents for each party secured under any pledge (Pfandrecht) or other accessory security interest granted in favour of such secured party in connection with the German Loan Security Documents, and to agree to and execute on its behalf as its representative any amendments, alterations or release to any German Loan Security Documents which create a pledge or any accessory security interest. The Loan Security Trust Deed Pursuant to the Loan Security Trust Deed, the Borrower Security Trustee agrees to hold on trust, and declares itself as trustee of, the covenants, undertakings, assignments and other security interests made or given, or to be made or given, under or pursuant to the Senior Security Documents (including, without limitation, the Assignment of Hedge Documents and the Related Security that is governed by German law and all monies from time to time received or recovered by the Borrower Security Trustee in connection with the realisation and enforcement thereof), for itself and for each of the Finance Parties (including, following the sale of the Loan to the Issuer, the Issuer) on the terms and conditions contained in the Loan Security Trust Deed and the Senior Facility Agreement and to be applied in accordance with the priorities of payment set forth therein. 106

107 DESCRIPTION OF THE MASTER LEASE AND THE PERMITTED SUBLEASES Preliminary Note Pursuant to an intermediate lease agreement (Zwischenmietvertrag) (the Master Lease), the Borrower (in the Master Lease referred to as the Hauptvermieter (master lessor)) leases all of the Properties with the exception of certain Properties 1 (the Non-Leased Properties) to W2005/Seven BV (the Master Lessee) (in the Master Lease referred to as the Zwischenvermieter (intermediate lessor)). The Master Lessee has sub-leased the Properties other than the Non-Leased Properties (the Leased Property) to Karstadt Warenhaus GmbH and Quelle GmbH (each a Major Sub-Tenant and together the Major Subtenants) pursuant to two global lease agreements (Gesamtmietverträge) (the Permitted Subleases). The parties to the Master Lease are the Borrower and the Master Lessee. The Master Lease is expressed to be entered into with the concurrence (unter Mitwirkung) of the Major Subtenants. The Master Lease Purpose Each Sub-Tenant currently utilises the Leased Property leased by it for certain purposes specified in the Master Lease (Permitted Use) (Erlaubte Nutzung). Subject to certain minimal restrictions, the Master Lessee or the relevant Sub-Lessee is permitted to make any change to the permitted use allowed by law. Duration of Lease (a) The term of the Master Lease begins in respect of a Leased Property on the date that it is transferred to the Borrower pursuant to the Real Property Purchase Agreement. The Master Lease commenced on 1 July If a Leased Property is located in a formal reconstruction zone pursuant to 144 Paragraph 1 No. 2 of the German Town and Country Planning Code (BauGB) and the competent authorities have not yet approved this Master Lease for the relevant Leased Property on the transfer date, then the Master Lease will apply for a period of 12 months with respect to that Leased Property. If the competent authorities give their approval within this period, then the provisions described in paragraphs (b) to (i) below will also apply with respect to this Leased Property Item. (b) The Master Lease ends 15 years after commencement, subject to certain exceptions set out in the Master Lease. (c) The Master Lessee is entitled to extend the Master Lease in respect of each Leased Property up three times, in each case for a period of five years. In respect of the Leased Property Bahnhofsplatz 7 in Munich, the extension option may only be exercised twice. The Master Lessee s exercise of the extension option must be notified in writing to the Borrower, in each case no later than 17 months (or 19 months in one case) before the end of the agreed or extended lease period. If the Borrower or the Master Lessee gives the required notice, the Master Lease is extended automatically by the respective period of extension. If an option is not exercised in a timely manner, all further options with respect to the relevant Leased Property lapse. (d) After the end of the lease period agreed upon or extended pursuant to the provision described in paragraph (c) above, the Master Lease continues indefinitely with respect to the relevant Leased Property if it is not terminated by one of the parties by registered letter on eleven months notice in the case of the Master Lessee or 13 months notice in the case of the Borrower, effective at month s end. The right to terminate can be used separately with respect to each individual Leased Property. 1 Bielefeld, Elsa-Brandström-Strasse 6 (WE ), Delmenhorst, Lange Strasse 96/97 (WE ), Hamburg, Wilhelm- Strauss-Weg 4 (WE ), Berlin, Elcknerplatz 6 (WE ), Berlin Rollbergstrasse 10 (WE ), Berlin, Passauer Strasse 38 (WE ), Duisburg, Universitätsstrasse 41/Beekstrasse 25 (WE ), Leipzig, Merseburger Strasse 84 (WE ), Steinen, Bahnhofstrasse, Lörracher Strasse 30 (WE ) and Berlin, Ansbacher Strasse 30 (WE ) (together the Non-Leased Properties). 107

108 (e) (f) The right of each party to extraordinary termination for significant cause (außerordentliche Kündigung aus wichtigem Grund) of the Master Lease remains unaffected. A significant cause exists if it is not reasonable to expect that the Master Lease will be continued until the end of the lease period by the terminating party given its obligations under the Master Lease. A partial termination only of the Master Lease for any reason whatsoever is excluded. Unless specifically provided otherwise, a significant cause requires in each case intentional or negligent breach of a duty set forth in the Master Lease to the other party. The Borrower can terminate the Master Lease for significant cause (aus wichtigem Grund) without complying with the notice period requirements if: (i) (ii) (iii) the Master Lessee is delinquent in paying the rent or the Ancillary Costs in an amount of at least two gross rental payments and has not paid the amount due within 15 banking days after the date amount is due; within a period of three years the Master Lessee is delinquent twice in paying the rent or the Ancillary Costs in an amount of at least one gross rental payment each time for a period of at least 15 banking days each time after the date the amount is due; the Master Lessee culpably and significantly breaches its other duties under the Master Lease and this condition is not corrected by the Master Lessee within 30 banking days and, in each case, a written request is made by the Borrower in which reference is made to the consequences of a continued breach of duty. The Borrower can exercise its right of termination as described above up to six months after the end of the 15 banking day period referred to even if the Master Lessee has subsequently paid the delinquent rent. The Master Lessee can terminate the Master Lease for significant cause (aus wichtigem Grund) without complying with any notice period requirements if the Borrower culpably and significantly breaches its duties under the Master Lease and this condition is not corrected by the Borrower within 30 banking days after a written request is made by the Master Lessee in which reference is made to the consequences of a continued breach of duty. The Master Lessee is further entitled to terminate the Master Lease if and when the Permitted Sublease terminates through no fault of its own. The provisions described above override the provisions in 543 Paragraph 2 Number 3 Subsections a) and b) of the German Civil Code (BGB). Rent and Ancillary Costs (a) The monthly rent for the Leased Property is A10,174,963, plus any prepayment of Ancillary Costs determined by the Borrower and VAT in the statutory amount. (b) (c) (d) In addition to the rent, the Master Lessee shall bear and must pay directly all ancillary costs (Nebenkosten) (Ancillary Costs), as well as all fees, taxes and other charges that may be introduced for the Leased Property in the future. Furthermore, the Master Lessee shall bear other ongoing payments that are payable by the Borrower pursuant to any hereditary building right in the Leased Property or any contractual agreements existing at the time of the start of lease, other than the costs of ground rent to be paid by the Borrower and other payments to be rendered based on the hereditary building right contracts and costs named in 1 Paragraph 2 of the Operating Cost Ordinance and costs of property management/facility management. The Master Lessee must procure that maintenance contracts with suitable and reliable specialist companies are concluded for all systems and facilities that require regular maintenance. The Master Lessee must procure that each Major Sub-Tenant transfers the gross rent owed to the Master Lessee under its Permitted Sublease into the B Portfolio Rent Account. In the event of late payment of rent, the Borrower is entitled to demand default interest solely in accordance with 288 para. 2 of the German Civil Code (BGB). 108

109 (e) In the event that a Major Sub-Tenant is in arrears with respect to gross rent payment under the Permitted Sublease, the gross rent payable by the Master Lessee to the Borrower shall be deferred in the amount and for the duration of default. In this case, any damage caused by such default, for which the Master Lessee is liable, is limited to the Master Lessee s legitimate claims against the Major Sub-Tenant. Rent adjustment At the beginning of each lease year, the monthly rent will be adjusted automatically in accordance with the consumer price index for Germany determined monthly by the Federal Office of Statistics in Wiesbaden. Transfer (a) The Master Lessee shall endeavour to procure that the Major Sub-Tenant corrects the current defects described in an appendix to the Master Lease entitled Defects within two lease years. In the event that, following the lapse of one lease year, defects persist on Leased Property Items sub-leased to Karstadt Warenhaus GmbH (as Major Sub-Tenant), and such defects are valued at more than A4,095,000, as calculated in accordance with the appendix to the Master Lease entitled Defects, the Master Lessee shall endeavour to procure that Karstadt Warenhaus GmbH deposits the amount of the value of such defects to the extent it exceeds A4,095,000 into the B Portfolio Deferred Capex Account until such defects have been removed. To the extent of any defects corrected, the deposited amount shall be released to Karstadt Warenhaus GmbH. (b) The Master Lessee must comply with the existing authorisations relating to the Permitted Use of the Leased Property as well as other official orders concerning the Leased Property or its utilization. The Master Lessee will bear the risk of future official orders concerning roof and main structural elements of the Leased Property in accordance with the provisions described in Maintenance and Repair below. (c) The Borrower is not liable for damages in the event of disruptions to water, gas, or electrical supply, central heating, elevators, sewage, waste disposal, and other facilities or all other disruptive third-party effects on the Leased Property unless these disruptions are based on an intentional or negligent breach of duty by the Borrower and/or one of its agents. Insurance (a) The Master Lessee must endeavour to procure that each Major Sub-Tenant takes out and continuously maintains adequate employer s liability insurance in respect of its operations on the Leased Property. (b) The Master Lessee must endeavour to procure that each Major Sub-Tenant enters into and continuously maintains insurance coverage specified in the Master Lease. In the event that a Permitted Sublease terminates prior to the expiration of the Master Lease, the Master Lessee shall procure corresponding insurance coverage, which identifies the Borrower as beneficiary. The Master Lessee must also ensure that the Borrower s creditors are identified as beneficiaries in the insurance policies obtained by the Master Lessee or a Major Sub-Tenant. The costs for these insurances are part of the Ancillary Costs to be borne by the Master Lessee or the Major Sub-Tenant. All insurance policies to be maintained as described in this paragraph (b) must be taken out with an insurance company that has a rating for its long-term unsecured obligations of A (or better) from Fitch, A2 (or better) from Moody s or A (or better) from S&P. If an insurance company falls below the aforementioned rating, the Master Lessee is obliged to procure that appropriate new insurance from an insurance company that meets the rating stipulations. A new insurance contract must be entered into after written request by the Borrower: (i) if a rating for long-term unsecured obligations falls below BB+ from Fitch, Ba1 from Moody s, or BB+ from S&P, at the earlier of: (A) the point in time of the earliest possible termination of the existing insurance contract; and (B) 90 days after the downgrading; or 109

110 (c) (ii) in every other case at the earlier of: (A) the point in time of the earliest possible termination of the existing insurance contract; and (B) one (1) year after the downgrading. The Master Lessee must provide the Borrower and other beneficiaries under the insurance policies as described in paragraph (b) above with annual verification of the type, scope and existence of the aforementioned insurance policies as well as of payment of the insurance premia and must immediately report insurance claims with a value of more than A250,000. Business Obligation The Master Lessee is obliged to operate, or have the Major Subtenants operate, each Leased Property for the duration of the lease as department stores and/or sporting goods stores to the same extent as previously for its business operations provided that its current permitted use is maintained. The obligation to operate a business in a Leased Property will not apply to the extent and for such period of time that operating in the Leased Property is not possible in part or in whole due to acts of God, legal or actual impossibility or execution of repair/maintenance work or for other reasons or the safety of the users is not guaranteed. Maintenance and Repair (a) The Master Lessee assumes maintenance and repair (including necessary renovation) of the entire Leased Property including structure, roof and exterior (Dach und Fach), and bears the corresponding costs; this also applies with respect to any superstructures/substructures and/or bridging works. (b) The Borrower must reimburse the Master Lessee for any expenditures related to the maintenance and repair of the Leased Property on structure, roof and exterior (Dach und Fach) in cases of Exceptional Expenditures. For purposes of the Master Lease, Exceptional Expenditures are expenditures related to measures required to maintain and repair the Leased Property on Roof and Divisions if and to the extent that the Master Lessee s expenditures exceed the amount of A5,350,000 over the course of a single calendar year. Structural Modifications by the Master Lessee (a) Subject to the building code and other regulations as well as the Permitted Use, the Master Lessee is entitled, at its own expense, to equip the Leased Property for its purposes, or authorize a Major Sub-Tenant to do so for its own purposes. Insofar as structural modifications substantially alter the primary construction of the outside of the Leased Property (as can be the case when increasing the structure s height or attaching constructions, but not in the case of an installation or conversion of showcases or display windows as well as portal or door installations, etc.), they require the Borrower s prior written consent. The Borrower may refuse to consent only if the value of the Leased Property or its ability to be rented out is considerably reduced by the structural modification and the Master Lessee or the Major Sub-Tenant refuses to assume an obligation to restore the Leased Property and to bear all related costs for this structural modification (also costs due to official orders and instructions issued in this regard). (b) The Master Lessee, in relations with the Borrower, bears all costs and risks that arise, and is liable for all damages, due to structural modifications carried out by it or a Major Sub-Tenant, including the authorisation costs and the costs for plans. The Master Lessee or the Major Sub- Tenant are entitled to any insurance benefits for these structural modifications. Structural Modifications by the Borrower The Borrower may undertake structural modifications which are needed to avoid impending dangers or to remedy damage, or which have been mandated by law or authorities, without the consent of the Master Lessee. The Borrower will give appropriate consideration to the interests and concerns of the Master Lessee, the relevant Major Sub-Tenant or any of their other subtenants during the modifications and will avoid disruptions to their business activities as far as possible. The Borrower must inform the Master Lessee in writing as soon as possible regarding the modifications and must coordinate the implementation with the Master Lessee. The implementation of any other structural 110

111 modifications by the Borrower requires the prior written consent of the Master Lessee, which may only be withheld for an important reason. Sales The Borrower undertakes to the Master Lessee and Major Subtenants not to sell a Leased Property either in full or in part to an operator of a department store and/or sporting goods store and/or fashion department store which is in direct or indirect competition with the relevant Major Sub- Tenant. If the Borrower violates the aforementioned sale prohibition, then the Master Lessee is authorised to terminate the Master Lease with a notice period of eleven calendar months, and the Borrower will be liable to the Master Lessee and the Major Subtenants for damage. Reconstruction If a Leased Property is completely or partially destroyed or severely damaged (20 per cent. of the useable volume (in cubic meters) of a Leased Property), other than through the fault of any party, the Master Lease shall be deemed to be terminated in relation to such Leased Property, unless the Master Lessee notifies the relevant Major Sub-Tenant or vice versa in writing within two months after the event that it is requesting reconstruction within 36 months. The Borrower will be bound if the Master Lessee or a Major Sub-Tenant makes such request to commence reconstruction after 18 months of the issue of notice As long as the use of the Leased Property is not possible, the payment of the respective rent and Ancillary Costs regarding the Leased Property will be suspended. Permitted Sublease The Borrower, the Master Lessee, and the Major Subtenants agree that in the event of the termination of the Master Lease (regardless of the grounds for such termination) the Permitted Subleases between the Master Lessee and each Major Sub-Tenant will continue as a lease between the Borrower and the relevant Major Sub-Tenant. Each party is obliged to cooperate in the implementation of any changes necessary as a result of this transfer of contract or adjustments of the easements granted pursuant to the provisions of the relevant Permitted Sublease. The Permitted Subleases Parties (a) The parties to the Karstadt Sublease are the Master Lessee and Karstadt. The parties to the Quelle Sublease are the Master Lessee and Quelle. Each Permitted Sublease is also expressed to be entered into with the concurrence (unter Mitwirkung) of certain other persons including the Sellers under the Real Property Purchase Agreement, the Borrower and Highstreet A. (b) Each of the Permitted Subleases is (with minor exceptions) in identical terms. The description of the provisions set out below therefore applies to both Permitted Subleases. Certain material differences between the Permitted Subleases are also described below. (c) The obligations of each of the Major Subtenants under the Permitted Subleases are guaranteed by KarstadtQuelle AG pursuant to the Parent Lease Guarantee. Leased Property and Purpose The Master Lessee leases to the Major Sub-Tenant in its entirety the Property listed in Appendix 3 including all buildings constructed on it. Duration of Lease (a) The provisions described in (b) to (f) governing term of the Master Lease described in The Master Lease Duration of Lease above apply to each Permitted Sublease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. (b) Under the Karstadt Sublease only, the Master Lessee is entitled twice to renew the Permitted Sublease with respect to the Leased Property Item München (Munich), Bahnhofsplatz 7* in each case, by five years on the same contractual terms. * The sale of this Property is not yet completed. This Property is currently cash collateralised. 111

112 (c) After the end of the lease period agreed upon or extended, the Permitted Sublease continues indefinitely with respect to the relevant Leased Property Item if it is not terminated by one of the parties by registered letter on twelve months notice, effective at month s end. At the end of the lease period so terminated, the Permitted Sublease is not considered extended indefinitely even if the Major Sub-Tenant continues using the Leased Property and the Master Lessee does not object to this continuation. The regular termination right (das ordentliche Kündigungsrecht) of the Major Sub-Tenant and the Master Lessee is otherwise excluded during the fixed lease period and any extension period resulting from exercising the option rights. Rent and Ancillary Costs (a) The monthly rent for the Leased Property (owned by the Borrower) is, in the case of the Karstadt Sublease, A10,311,713 and, in the case of the Quelle Sublease, A293,673. A prepayment of Ancillary Costs is to be determined by the parties, which will be due in addition to the rent, plus VAT in the statutory amount. (b) The provisions described in (b) and (c) governing the payment obligations of rent and ancillary costs under the Master Lease described in The Master Lease Rent and Ancillary Costs above apply to the Permitted Sublease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. For the partial rent of the month in which the lease begins, the lessor shall pay the pro-rated rent amount along with the first full month rent amount. In the case of late payment, the Master Lessee is entitled to demand default interest solely in accordance with 288 para. 2 of the German Civil Code (BGB). Rent Adjustment The provisions described in (a) and (b), governing rent adjustment under the Master Lease described in The Master Lessee Rent Adjustment above apply to the Permitted Sub Lease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. Transfer The maintenance obligations described in paragraph (a) of The Master Lessee Transfer above apply directly to the Major Subtenants under the Permitted Subleases. The provisions described in (b) and (c) The Master Lessee Transfer above apply to the Permitted Sub Lease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee, other than that the Master Lessee shall continue to bear the risk of future official orders concerning roof and main structural elements of the Leased Property in accordance with the provisions described in Maintenance and Repair. Insurance (a) The Major Sub-Tenant shall take out and continuously maintain adequate employer s liability insurance in respect of its operations on the Leased Property. (b) In addition, the Major Sub-Tenant shall enter into and continuously maintain the insurance coverage specified in the Permitted Sublease for the duration of the Permitted Sublease. The Master Lessee shall be identified as a beneficiary therein. The Major Sub-Tenant will also ensure that each third party who provided funds for the purchase of the Leased Property by the Borrower likewise is identified as a beneficiary in the insurance policies obtained by the Major Sub-Tenant. The costs for these insurances are part of the Ancillary Costs to be borne by the Major Sub-Tenant. All insurance policies to be maintained as described in this paragraph (b) must comply with the Insurance Requirements. 112

113 (c) The Major Sub-Tenant must provide the Master Lessee and other beneficiaries under the insurance policies as described in paragraph (b) above with annual verification of the type, scope, taking out, and existence of the aforementioned insurance policies as well as of payment of the insurance premiums and must immediately report insurance claims with a value of more than A250,000. Business Obligation The provisions governing the Master Lessee s and/or Sub-Tenant s obligation to operate the Leased Property Items under the Master Lease described in The Master Lessee Business Obligation above apply to the Permitted Sublease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. Maintenance and Repair (a) The Master Lessee assumes maintenance and repair (including necessary renovation) of the roof and all main structural elements and bears the corresponding costs; this also applies with respect to any superstructures/substructures and/or bridging works. (b) The Major Sub-Tenant assumes the maintenance and repair (including necessary renovation) obligations in respect of the rest of the Leased Property. Structural Modifications by the Major Sub-Tenant The provisions described in (a), (b), (c) and (d) governing the Master Lessee s obligations with respect to structural modifications under the Master Lease described in The Master Lessee Structural Modifications by the Master Lessee above apply to the Permitted Sub Lease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. Sub-Leasing (a) The Major Sub-Tenant is authorised to fully or partially sub-lease the Leased Property or to allow third parties the use of the Leased Property in any other way. (b) In case of a sub-leasing or any other third-party use, the Major Sub-Tenant is liable for all actions and omissions of such third party as if the Major Sub-Tenant had committed those actions or omissions itself. The Major Sub-Tenant will bear all VAT risks resulting from the sub-leasing and to this extent indemnifies the Master Lessee. (c) Any rental, leasehold or usage contracts (Third-Party Leases) between the seller of the relevant Leased Property item pursuant to the Real Property Purchase Agreement and third parties that might still exist and would be transferred to the Borrower or Highstreet A (as the case may be) according to 566, 578 of the German Civil Code (BGB), shall be converted to sub-leasing contracts between the Major Sub-Tenant and the respective user. (d) By way of security, the Major Sub-Tenant hereby assigns all claims arising from the sub-leasing to the Master Lessee. Sales The Master Lessee undertakes not to sell the Leased Property or a Leased Property Item either in full or in part to an operator of a department store and/or sporting goods store and/or fashion department store which is in direct or indirect competition with the Major Sub-Tenant. If the Master Lessee violates the aforementioned sale prohibition, then the Major Sub-Tenant is authorised to terminate the Permitted Sublease with a notice period of twelve calendar months, and the Master Lessee will be liable to the Major Sub-Tenant, including the Major Subtenants, for damages. Reconstruction The provisions governing the Master Lessee s obligations with respect to reconstruction under the Master Lease described in The Master Lessee Reconstruction above apply to the Permitted Sub Lease with the rights and obligations of the Master Lessee becoming the rights and obligations the Major Sub-Tenant, and the rights and obligations of the Borrower becoming the rights and obligations of the Master Lessee. 113

114 Master Lease The Borrower or Highstreet A (as the case may be), the Master Lessee, and the Major Sub-Tenant agree that in the event of the termination of the Master Lease or the Portfolio A Master Lease (as the case may be) (regardless of the reason) the lease between the Master Lessee and the Major Sub- Tenant will continue as a lease between the Borrower or Highstreet A (as the case may be) as new Master Lessees and the Major Sub-Tenant; the previous Master Lessee will no longer be a party to the lease. 114

115 PORTFOLIO DUE DILIGENCE The Portfolio has been the subject of various due diligence reviews conducted prior to the Issue Date as described below (the Portfolio Due Diligence). Legal Due Diligence Report Prior to the origination of the Loan, the Originator undertook an investigation of title to the Properties in order to verify that the Borrower would have good title to the Properties charged, free from any encumbrances or other matters which would be considered to be of a material adverse nature. In the course of this process, the Originator received the Legal Due Diligence Report. The Legal Due Diligence Report is based on the information provided by the sellers in a physical dataroom prior to or on 24 March 2006, unless an earlier date is indicated in the legal due diligence report. Environmental Report The Environmental Report was prepared for Karstadt Immobilien AG & Co. KG by a structural and environmental consultant (the Environmental Consultant). It summarises seven different Facility and Environmental Due Diligence Assessments undertaken between March 2005 and February The Environmental Report is based largely on information provided to the Environmental Consultant by others and this information was not necessarily independently verified by the Environmental Consultant. Site inspections were also carried out during the course of the various due diligence assessments upon which the Environmental Report is based. The purpose of the assessments carried out by the Environmental Consultant was to assess the general condition of the building or Property only. An assessment of each room in a building was not performed. It can therefore not be ruled out that other issues, not identified in the Environmental Report, may be present on a Property. The Environmental Report covers both the Properties and other properties used in the business of KarstadtQuelle AG and its subsidiaries which were acquired by Highstreet A. The report notes that the structures of all department stores currently in operation are fully functional and that immediate repairs are basically related to leakages in roofs and basement walls and to necessary concrete repair. The report also notes that certain environmental issues were detected in respect of the Properties (see further: Risk Factors Factors Relating to the Properties Environmental Matters ). Structural and environmental issues requiring immediate attention must be rectified by the relevant Sub-Tenant under the relevant Permitted Sublease within the first two years of the lease term (see further The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Permitted Subleases Transfer ). Certain expenditures will also be required over the medium to long term to maintain the properties and address issues raised in the Environmental Report. Under the Master Lease and Permitted Subleases, maintenance obligations are assumed by the Master Lessee and Major Subtenants (although the Borrower will be liable to reimburse the Master Lessee in respect of Exceptional Expenditures related to measures required to maintain the Roof and Divisions). As to maintenance obligations see The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Master Lease Maintenance and Repair and The Loan and the Related Security Description of the Master Lease and Permitted Subleases The Permitted Subleases Maintenance and Repair. Accounting Report The Accounting Report reports on the results of due diligence carried out by accounting advisors in relation to property issues (including leasehold agreements, rental agreements, cash-flow relevant contracts, service charges, technical reports by the Environmental Consultant, fire protection requirements and insurance), certain specified taxation issues (including real estate tax) and a financial analysis of employee issues. The Accounting Report covers both the Properties and other properties used in the business of KarstadtQuelle AG and its subsidiaries which were acquired by Highstreet A. The main basis of information for the report was a data room provided by the sellers of the properties. 115

116 Valuation In connection with the origination of the Loan, the Originator obtained a valuation of 174 properties, the Properties and Portfolio A Properties, located throughout the Federal Republic of Germany and being owned by companies which are wholly owned entities of Karstadt Quelle AG from Cushman & Wakefield (the Valuer) dated 3 July 2006 with a valuation date of 1 July 2006 (the Valuation). The Properties are part of the 174 properties valued. The Valuation is addressed to the Originator as well as Goldman Sachs International and Portfolio Acquisition Ltd. 1 and prepared on the basis of the market value definition relevant to international property valuations as defined by the International Valuation Standards Committee and adopted by the Royal Institution of Chartered Surveyors. Accordingly, the market value is: The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. As at the date of the Valuation all 174 properties in the portfolio have been inspected. Due to the nature of the portfolio principally comprising retail investment properties the market value has been determined on the basis of an income capitalisation approach. The valuation is based on the following basic calculation assumptions: (a) the valuation is performed on the basis of parameters determined as at the date of the valuation, (b) the average annual rate of inflation is implicit in the capitalisation rate selected and has not been explicitly reflected in the Valuer s assessments of the rent and costs as passing or at reversion; and (c) the capitalisation rate has been applied to the valuation on the assumption that payments are made annually in arrears. In addition, the Valuer has made certain specific assumptions relating to costs (e.g. non-recoverable costs equal to 1.00% of gross rent), rental uplifts and deductions for capital expenditures. The property owner is responsible for structural repairs and maintenance for the building with no formal legal definition available for the dividing line between measures that would fall into the tenants sphere of responsibility and measures where the costs would minimise the owner s cash flow. For the purposes of the calculation and in keeping with the assumption of a regular cash flow in perpetuity it is therefore in the Valuer s view prudent to allow for a regular deduction to cash flow to account for such measures that will occur from time to time. For the purposes of the valuation the Valuer has reflected a regular deduction of A 6.00 per m 2 of lettable area per annum in respect of the retail properties, A4.00 per m 2 of lettable area per annum in respect of the remaining properties as well as A15.00 per space per annum in respect of the car parking spaces. The valuation has been concluded on the basis of a leaseback agreement on each property. As such no immediate vacancies are reflected in the calculation model. At the end of the lease contract periods the Valuer has deducted an allowance for tenants improvements amounting to A/m 2 of lettable area, letting fees equal to three months rent. As in respect of the Valuer s assessment of the market rental values for the subject properties the Valuer has also made reference to their experience with the annual valuation of a department store portfolio during the course of the last four years in order to determine a point of reference for the capitalisation rate. According to, and subject to the assumptions and reservations set out in, the Valuation, the 174 properties had an aggregate market value of A3,760,400,000, with the 109 Properties forming part of the Portfolio valued at A1,707,946,387. Upon expiry of the proposed lease contract agreements the Valuer has estimated the market rental value. The average market rental value for the department stores varies between 7.89 A/m 2 per month in respect of the property in Wismar Lübsche Strasse 5a to A/m 2 per month in respect of the property in Karlsruhe Kaiserstrasse The determination of the market rental value has made reference to the following factors: (i) direct comparables of past financing or annual valuations, and (ii) historical turnover figures of the subject portfolio. In respect of the non-retail assets the Valuer has conducted research into the relevant market rents for the assets and locations concerned and have made adjustments as appropriate. The market rental value in relation to the 109 Properties amounts to a total of A132,774,087 per annum. The vacant possession value has been based on an income capitalisation approach with appropriate deductions for loss of income, increased running cost and re-letting detailed as follows. For the purposes of the vacant possession calculation the Valuer has assumed an average period of 24 months before rental payments commence. The Valuer has discounted the loss in income over the void period 116

117 using the capitalisation rate and deducted the net present value. During the course of the assumed void period additional property running costs will be incurred by the landlord. For the purposes of the vacant possession calculation the valuer has therefore deducted an allowance of 0.50 A/m 2 lettable area per month in respect of these costs. The Valuer has discounted the loss over the void period using the capitalisation rate and deducted the net present value. At the end of the assumed 24 month void period the Valuer has deducted an allowance for tenants improvements amounting to A/ m 2 of lettable area. The total investment has been discounted over the assumed void period using the capitalisation rate and the net present value deducted. At the end of the assumed 24 month void period the Valuer has deducted an allowance for letting and marketing costs amounting to 3 months rent based on the total estimated rental value. The total investment has been discounted over the term of the void using the capitalisation rate and the net present value deducted. As for the Market Value scenario and in accordance with the Environmental Report the Valuer has deducted the calculated investment volume in respect of immediate repairs in respect of the properties that have been valued. As for the Market Value scenario and in accordance with the Environmental Report the Valuer has also deducted the calculated investment volume in respect of medium term repairs in respect of the properties that have been valued. The total investment has been discounted over a period of 5 years using the capitalisation rate and the net present value deducted. The Valuer assumed that the retail space structure of selected properties will be optimised. The cost assessment for the individual space conversion measures has been estimated on a property by property basis. The total investment has been discounted over the term of the void using the capitalisation rate and the net present value deducted. The total vacant possession value of the 109 Properties amounts to a total of A1,496,462,845. The valuation represents the analysis and opinions of the Valuer at 1 July 2006 and may not be indicative of, present or future value. In each case there can be no assurance that another valuer would not have arrived at a different valuation, even if such valuer used the same general approach to and same method of valuing the property. In addition, the Valuation seeks to establish the amount a willing buyer would pay a willing seller. Such amount could be significantly higher than the amount obtained from the sale of a Property under a distress or liquidation sale. There has been no revaluation of the Properties for the purposes of the issue of the Notes. 117

118 THE LOAN AND THE RELATED PROPERTY SUMMARIES Loan Overview Goldman Sachs Credit Partners L.P. (the Originator) in conjunction with Karstadt Hypothekenbank (KHB) provided a joint-venture, formed of affiliates of The Whitehall Funds and affiliates of KarstadtQuelle AG, with mortgage loans with a total balance of approximately A3.6 billion to finance their acquisition of 172 commercial properties located in Germany which were over 99.9 per cent. let to affiliates of KarstadtQuelle AG. KHB provided a A0.9 million senior secured financing on a subportfolio comprising 63 assets (Portfolio A) held by Highstreet Portfolio A GbR. The Originator provided a A1.2 billion senior secured financing (the Loan) on another sub-portfolio comprising 109 properties (the Properties or the Portfolio) held by the Borrower as well as a maximum A1,470,200,750 mezzanine facility secured on both Portfolio A and the Properties. This transaction is the securitisation of the A1.2 billion senior secured mortgage loan secured on the Properties, the Loan. Whitehall Funds 51% KQ 49% Hold Co 1,465m GS Mezzanine KHB 892m Portfolio A Portfolio B 1,196m GS Senior Property Property Property Property Collateral Portfolio OMV: 2,038m OMV: 1,708m Property The Loan is a loan to the Borrower, a newly established special purpose vehicle holding the Portfolio. The Loan is secured, amongst others, by first ranking land charges over the Portfolio assets, the assignment of rent in relation to the Portfolio assets, pledges of insurance policies in place and a pledge of the shares of the Borrower. The Portfolio consists of 109 commercial properties located in Germany and is over 99.9 per cent let to affiliates of KarstadtQuelle AG until at least July

119 Selected Key Economic Loan and Portfolio Terms Mortgage Loan Information Originator Goldman Sachs Credit Partners L.P. Borrower Highstreet Portfolio B GbR (a newly formed SPV) Closing Date 30 June 2006 Maturity 20 July 2011 Last Drawdown 31 August 2006 Extension Options None Amount at Securtisation A1,192,021,267 (fully drawn) Loan Interest Floating Rate: 3-month Euribor + margin Loan Interest Payment Date Borrower Interest Rate Hedge Call Protection ICR on the Loan (1st Quarter) Cut Off Date Loan-to-Open Market Value Cut Off Date Loan-to-Vacant Possession Value Quarterly: 20 October, 20 January, 20 April and 20 July Through a cap agreement Prepayment fees applicable for the first three years of the transaction. Mezzanine Loan Allocated to Portfolio Scheduled Amortisation First Loan Interest Payment Date Borrower Hedge Provider Call Protection Expiry Date 2.39x DSCR on the Loan (1st Quarter) A415,607, % of the original debt amount per annum paid quarterly 20 October 2006 Goldman Sachs Capital Markets LP. 3 July x 69.8% LTV Ratio at Maturity 2 0.0% 79.7% Loan-to-Vacant Possession Value at Maturity 3 On each Loan Payment Date, the Loan will amortise according to a fixed amortisation schedule, with amortisation payments equal to 0.25% of the original loan amount of the remaining Properties. The Borrower will have the right to sell Properties subject to prepayment of the loan with an amount equal to the release amount and applicable break costs. The release amount to be paid equals to the then allocated loan amount of the sold asset(s) multiplied by the release price of the sold assets. Release prices ranging from 110% to 118.6% were assigned to each property in the Portfolio, with the weighted average release price being 114.7%. 0.0% 119

120 Portfolio Overview Portfolio Information Number of Properties Total Lettable Area Day-1 Passing Rent Sub-Tenants 109 Location Across Germany 797,726 square metres Property Type 4 Retail (94.2%), parking (3.5%), office (1.3%) and other (1.1%) A127,434,144 per annum (A13.3 per square metre per month) Karstadt Warenhaus GmbH (KQ subsidiary): 97.1% of total gross rent Quelle AG (KQ subsidiary): 2.8% Third Parties: 0.1% Lease Start Date For KQ subsidiaries: 1 July 2006 Third Parties: various Tenure (By OMV) Freehold (70%) Hereditary Building Rights (5%) Mixed (19%) Partial Ownership (6%) Sponsor The Whitehall Funds (51%) KarstadtQuelle AG (49%) Property Valuer Cushman & Wakefield Chartered Surveyors Open Market Value Market Rental Value A1,707,946,387 (A2,141 psm) A132,774,087 (A13.9 per square metre per month) 2 Assuming Borrower meets their business plan 3 Assuming Borrower meets their business plan 4 Percentage of total open market value Day-1 Net Operating Income Vacancy A115,450,444 Portfolio is 99.7% let (by market rent) Lease Expiry Date For KQ subsidiaries: 1 July 2021 Third Parties: various Day-1 Ground Rent Asset Management A6,727,774 per annum Archon Group Valuation Date 1 July 2006 Vacant Possession Value A1,496,462,845 (A1,876 psm) The Portfolio comprises a total of 109 real estate assets of which 48 comprise department stores. The department store assets are located in cities situated throughout Germany. Approximately 91.4 per cent. of total assets by number are situated in western Germany or Berlin with 8.6 per cent. situated in the other parts of east. The largest concentrations of assets by number are in the states of Bavaria 120

121 (31 assets) and North Rhine Westphalia (17 assets). Outside of the city of Berlin a total of 5 assets are situated in eastern Germany. State Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) Baden- Wuertenberg 6 5.5% 109,333, % 89,288, % 8,929, % 8,424, % 77,837, % Bayern % 455,211, % 382,915, % 34,400, % 29,064, % 312,655, % Berlin % 308,221, % 271,080, % 19,870, % 19,085, % 215,303, % Bremen 4 3.7% 28,316, % 25,995, % 2,479, % 2,193, % 20,158, % Hamburg 8 7.3% 114,897, % 102,195, % 8,786, % 8,011, % 81,798, % Hessen 5 4.6% 61,661, % 62,292, % 4,396, % 4,146, % 43,898, % Niedersachsen % 111,163, % 101,276, % 8,529, % 7,808, % 79,139, % Nordrhein - Westfalen % 301,023, % 271,283, % 22,364, % 20,727, % 212,423, % Rheinland - Pfalz 1 0.9% 12,432, % 11,232, % 1,617, % 997, % 8,851, % Sachsen 3 2.8% 96,199, % 84,535, % 6,396, % 6,065, % 65,552, % Sachsen-Anhalt 2 1.8% 50,839, % 44,008, % 4,198, % 3,992, % 36,194, % Schileswig- Holstein 9 8.3% 58,644, % 50,358, % 5,465, % 4,932, % 41,750, % TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % %of Total The most of the open market value of the Portfolio is represented by two cities, Berlin and Munich, each accounting for around 18% of total Portfolio value. The five largest towns and cities represent 53.2% of total value of the Portfolio and the ten largest towns and cities represent 71.0% of total value of the Portfolio. City Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) Berlin % 308,221, % 271,080, % 19,870, % 19,085, % 215,303, % München 4 3.7% 300,492, % 248,924, % 20,154, % 17,370, % 204,844, % Hamburg 8 7.3% 114,897, % 102,195, % 8,786, % 8,011, % 81,798, % Nümberg % 94,035, % 81,925, % 8,165, % 6,661, % 64,609, % Dresden 1 0.9% 91,210, % 84,535, % 5,464, % 5,261, % 62,000, % Dortmund 1 0.9% 83,643, % 81,146, % 4,373, % 4,245, % 59,547, % Mülheim 1 0.9% 72,834, % 58,846, % 5,800, % 5,563, % 51,852, % Köln 1 0.9% 63,603, % 61,649, % 4,390, % 3,973, % 43,399, % Hannover 2 1.8% 45,936, % 44,746, % 2,906, % 2,798, % 32,703, % Magdeburg 1 0.9% 37,891, % 33,120, % 3,058, % 2,923, % 26,975, % Other % 495,177, % 428,293, % 44,463, % 39,556, % 352,527, % TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % %of Total The 47 department stores and 14 specialist stores represent over 94% of the total Portfolio open market value. These stores are most often situated in central, shopping areas, high streets of the respective towns, cities and suburbs they are located in. Use Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) Dept. Stores % 1,529,714, % 1,335,803, % 113,039, % 103,047, % 1,069,096, % Spec. Stores % 78,908, % 68,955, % 6,162, % 5,296, % 56,176, % Parking % 59,578, % 57,979, % 4,619, % 4,034, % 41,994, % Office 9 8.3% 21,639, % 13,618, % 2,182, % 2,040, % 15,405, % Other % 18,105, % 20,105, % 1,429, % 1,031, % 12,889, % TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % %of Total 121

122 The Portfolio is diversified in terms of asset size. The department stores are in general the larger assets within the Portfolio with an average lettable area of 13,887 square metres. Other properties in the Portfolio are in general smaller with an average lettable area below 2,339 square metres. Asset Size sqm Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) 51, % 74,444, % 74,476, % 5,971, % 4,989, % 52,577, % 1,500 5, % 39,406, % 34,915, % 3,536, % 2,887, % 28,054, % 5,000 10, % 351,244, % 297,105, % 29,141, % 26,309, % 250,058, % 10,000 15, % 298,271, % 262,598, % 25,641, % 23,002, % 212,345, % 15,000 25, % 327,113, % 302,097, % 23,514, % 21,240, % 228,868, % 25, % 617,465, % 525,269, % 39,628, % 37,021, % 423,657, % TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % %of Total The Portfolio comprises 77 freehold assets, 17 mixed tenure assets, 5 partial ownership assets and 10 leasehold assets. Total ground rent to be paid on the Portfolio to land owners of the leasehold or the mixed tenure properties amounts to A6.7 million per annum. Tenure Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) Freehold % 1,200,742, % 1,037,397, % 83,480, % 79,775, % 843,291, % Mixed % 319,124, % 290,985, % 25,747, % 21,455, % 220,461, % HBR % 87,538, % 77,321, % 10,611, % 7,181, % 62,113, % Partial Ownership 6 5.5% 100,540, % 90,759, % 7,594, % 7,038, % 69,695, % TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % %of Total The assets are let to the Master Lessee who in turn sublets the properties to KQ affiliates. The Master Lessee is an SPV with its only assets let to the KQ affiliates through a double net, Dach und Fach sublease where other than the maintenance of the exterior walls and roofs of the leased assets maintenance is the responsibility of the tenant. There Master Lessee is required to reserve A5,255,926 per annum from the gross rent it receives from the subtenants to create a reserve that can cover for maintenance expenses (including limited related facility and asset management expenses) that are the landlord s obligation. The properties of the Portfolio are over 99.9% let to affiliates of KarstadtQuelle AG. Karstadt Warenhaus GmbH, KQ s retail business, accounts for 97.1% of the rental income, while Quelle AG, KG s mail order business, is responsible for 2.8% of the rental income. Third party tenants account for 0.1% of total rental income. The assets are sublet to the Q affiliates through a 15-year lease (with no break options) that has three 5-year extension options. The subleases are guaranteed by KarstadtQuelle AG, the parent company of the tenants. The leases are indexed to inflation with annual uplifts equal to 60% of the inflation during the previous 12 months 2. Use Nr %of Total Open Market Value (A) %of Total Vacant Possession Value (A) %of Total Gross Passing Rent (A) %of Total Net Operating Income (A) %of Total Allocated Senior Loan (A) Karstadt Warh % 1,660,463, % 1,456,941, % 123,740, % 112,379, % 1,161,758, % Quelle % 35,554, % 28,557, % 3,524, % 2,992, % 25,312, % Third Parties 2 1.8% 2,831, % 2,526, % 169, % 168, % 2,015, % Vacant 7 6.4% 9,096, % 8,436, % 0 0.0% -90, % 6,476, % %of Total TOTAL % 1,707,946, % 1,496,462, % 127,434, % 115,450, % 1,195,562, % 2 Inflation will be measured by consumer price index for Germany determined monthly by the Federal Office of Statistics in Wiesbaden calculated on the respective last published original basis (currently 2000=100) compared to the status at the beginning of the lease or compared to the status of the last rent adjustment. 122

123 Overview of The Five Largest Assets 1. Neuhauser Strasse 18 (Oberpollinger), Munich (WE ) Parking Year of Date of Lettable Area Spaces OMV % of Total VPV % of Total Passing Rent % of Totall Construction Refurbishment 30,945 sqm 407 A136,397, % A91,868, % A8,395,413 (A22.6 psm per month) 6.6% The city of Munich is the capital of the federal state of Bavaria and is one of the largest cities in Germany. Numerous multinational companies have their headquarters there, as have several renowned institutes of research and science. The Oberpollinger department store is located on Neuhauser Strasse, Munich s most frequented shopping street in direct proximity to Karlsplatz. Due to its corner position and its architecture, the property has high visibility. Furthermore, it is well connected to the public transport network via the Stachus local rail and underground station. Public transport stops and an underground station are approximately 50 m away. This square is one of the busiest urban transport hubs in Europe, both as a pedestrian and road traffic junction and as the meeting point of several urban railway and underground routes. In the surroundings there are commercial, retail and residential properties. Some buildings are listed as being under historical building protection. The building consists of two sections: a department store (A) and a future parking and office building (B). Section A has seven floors with a basement area, and comprises retail space, technical rooms and storage areas. There are two entrances, one main entrance at the front of the building and one side entrance. There is also a bridge at first floor level and a tunnel at basement level, connecting to the adjacent Karstadt Sporthaus at Neuhauser Strasse 20. Section B of the building is currently being redeveloped. The reopening is anticipated for the autumn of A parking garage is located underneath the building. The area data provided refers to the redeveloped property. 123

124 2. Bahnhofplatz 7, Munich (WE ) Lettable Area Parking Spaces OMV % of Total VPV % of Total Passing Rent % of Total 36,923 sqm 525 A130,460, % A127,388, % A8,530,959 (A19.3 psm per month) Year of Date of Construction Refurbishment 6.7% 1900/ The subject property is situated in the city centre of Munich, opposite the main station, approx. 300 metres away from Munich s main shopping street Kaufingerstrasse, and around 1.7 kilometres from the Isar river. Traffic connections are good and the property is especially well connected to the public transport network: the basement of the store has direct access to one of the main local rail and underground stations, the Stachus. Due to its corner position and its architecture, the property has high visibility. The micro location is appropriate for retail use both by pedestrian shoppers and for car based shopping, due to the department store s car parking facility. Commercial and retail properties constitute the main surrounding properties. The subject property is a department store comprising an older and a newer building. The buildings are connected by a bridge on all floors apart from the ground floor. The old building, which was constructed in approximately 1900, is a former apartment building now redeveloped with six storeys of department store space with an additional basement and is under historical protection. There are two direct links to the subway at first basement level. The newer building was constructed in 1971 and has six storeys of department store space with five additional basements. Karstadt s underground parking garage has 525 parking spaces situated in the basement of the new building. Both buildings allow access to the department store from all four sides. The old building includes a food market and fast food and coffee shops in the basement. In each building the ground to fourth floors are predominately used as retail areas. The 4th floor of the old building contains a restaurant with kitchen. The 5th floor is used for offices, social facilities, storage and building services. 124

125 3. Kurfürstendamm 231 (Wertheim), Berlin (WE ) Lettable Area Parking Spaces OMV % of Total VPV % of Total Passing Rent % of Total 25,704 sqm 0 A97,836, % A87,567, % A4,838,047 (A15.7 psm per month) Year of Date of Construction Refurbishment 3.8% The city of Berlin is the capital of Germany, has the highest population in Germany and is also the city with the largest area. Berlin constitutes a self-contained federal state in the Federal Republic of Germany. The city has a population of some 3.4 million. The city has a rich historical heritage and constitutes an attractive economic location. Traffic connections are good; Berlin is connected to the federal motorway system via the A111, A113 and the A115. The property is situated in the district of Charlottenburg, 6 kilometres southwest of Berlin s city centre, in a prime position on the well-known and highly frequented shopping street Kurfürstendamm. Furthermore, it is well connected to the public transport network. The property is surrounded by a mixture of commercial and residential buildings with retail use, offices, gastronomy and hotels. The property is developed as a six storey department store with an additional basement level and an upper floor for technical installations on the flat roof. The department store is connected to an adjacent parking garage and an office building via a passage under the office building and another entrance which links the department store with the parking garage. From the basement to the 4th floor there are retail areas. Office and storage areas are on the 5th floor. The restaurant is on the 6th floor. 125

126 4. Pragerstrasse 12, Dresden (WE ) Parking Year of Date of Lettable Area Spaces OMV % of Total VPV % of Total Passing Rent % of Total Construction Refurbishment 28,405 sqm 310 A91,210, % A84,535, % A5,464,566 (A16.0 psm per month) 4.3% Dresden is situated in the eastern part of Germany and is the capital of the Federal State of Saxony. The city of Dresden is situated some 190 kilometres south of Berlin close to the cities of Leipzig and Chemnitz. The Polish and the Czech borders are situated approximately 90 kilometres to the east and some 40 kilometres to the south-east respectively. Due to its location Dresden benefits from an excellent traffic infrastructure (A4, A13 and A14 motorways). Furthermore, Dresden is well-known for its historical buildings such as the Frauenkirche, Semperoper and Zwinger which attract millions of tourists every year. The department store is situated in the city centre and offers direct access to Dresden s pedestrian zone, Prager Strasse, which is one of the most frequented shopping streets in Dresden. Due to its freestanding position the main building has high visibility. The department store is well connected to the public transport network. The micro location is appropriate for retail use both by pedestrian shoppers and for car based shopping due to the department store s car parking facility. In direct proximity the Altmarkt-Galerie managed by ECE comprises more than 100 shops on 26,000 square metres. The site is surrounded by commercial buildings, department stores and hotels. Main station, tram and bus stops are within walking distance. The subject property constitutes a department store distributed over six storeys and three basement levels, with an additional technical storey on the flat roof. The underground parking garage of the department store is located on the second and third basement levels. All levels from the first basement to the third floor predominately comprises sales area. A restaurant with a kitchen, offices and social facilities are located on the fourth floor, and the fifth floor contains storage and building services. A separate parking area is located adjacent to the department store. Upon inspection, the property appeared to be in good condition and its technical facilities appeared to be well maintained. 126

127 5. Hermannplatz, Berlin (WE ) Parking Year of Date of Lettable Area Spaces OMV % of Total VPV % of Total Passing Rent % of Total Construction Refurbishment 31,170 sqm 635 A88,725, % A75,064, % A6,600,000 (A17.6 psm per month) 5.2% The building is situated in the Kreuzberg district of Berlin, directly on the B179 main road Hasenheide / Karl-Marx-Strasse, which binds the city centre with the A 100 motorway. Access by public transport is also very good. The department store has a direct connection to the Hermannplatz underground station and Berlin-Tempelhof airport is situated nearby. The surroundings consist of a mixture of commercial, retail, office and residential buildings. The property consists of three building sections. The first is a department store, the second a residential and office building and the third a parking garage. The department store comprises a seven storey old building and a four storey new building, both with additional basements. In the first basement there are changing rooms, logistics and delivery areas as well as storage rooms and retail areas. The second basement contains technical rooms (also in the fifth storey) and the passage to the underground train station, which crosses the site. The ground floor to third floors are predominantly retail with office areas. The restaurant with kitchen is on the fourth floor. The parking garage was constructed in The parking building has two separate sets of entrance and exit gateways, the approach to the parking levels is effected by a spiral ramp. The multi storey parking garage has six storeys and 635 parking spaces. The residential and office building is developed with six storeys including the attic storey and is currently used as office area from the ground to third floors. The year of construction is estimated at 1910 in the absence of detailed information. Overall, the general condition of the property was found to be good. 127

128 THE TRANSACTION DOCUMENTS THE LOAN SALE AGREEMENT AND RETAINED INTEREST HOLDER INTERCREDITOR DEED Loan Sale Agreement On the Issue Date, the Issuer will issue the Notes and with the net proceeds of such issue will acquire the Loan (excluding the right to receive Retained Interest) from the Originator pursuant to the terms of a loan sale agreement (the Loan Sale Agreement) between, among others, the Originator and the Issuer. Under the Loan Sale Agreement, the Retained Interest Holder will retain the right to receive Retained Interest (as defined below) and will sell the Loan along with all other associated rights (including rights to receive payment of interest other than Retained Interest) to the Issuer. Pursuant to the Loan Sale Agreement, the Originator will agree to sell and the Issuer will agree to purchase the Loan excluding the right to receive Retained Interest and the Originator will transfer to the Issuer its interests in the Related Security. The Originator s interest in the accessory security (akzessorische Sicherheiten) created under the Accessory Security Documents will be transferred on the Issue Date from the Originator to the Issuer by operation of law. The rights of the Originator under the Loan Intercreditor Agreement will be sold and assigned to the Issuer pursuant to the Loan Sale Agreement and otherwise in accordance with the Loan Intercreditor Agreement. Upon such sale and assignment the Issuer shall be a New Senior Lender as defined in the Loan Intercreditor Agreement. The Initial Purchase Price under the Loan Sale Agreement will be paid by the Issuer to the Originator on or about the Issue Date. In addition, the Issuer will pay to the Originator, on each Payment Date, amounts available in accordance with item (l) of the Pre-Enforcement Priority of Payments or item (k) of the Post-Enforcement Priority of Payments, as applicable. The amount of any payment to be made by the Issuer to the Originator pursuant to the Loan Sale Agreement on account of interest accrued prior to the assignment of the Loan to the Issuer shall be recorded by the Cash Manager and paid to the Originator by the Cash Manager in accordance with the provisions of the Cash Management and Issuer Account Bank Agreement. Arranging fees and prepayment fees due to the Originator under the Senior Facility Agreement (along with rights to receive payment of Retained Interest) will not be sold and assigned and will not form part of the Available Interest Collections. The Loan Sale Agreement will be governed by German law. Retained Interest Retained Interest is that part of the interest which accrues on the Loan from and including the Issue Date calculated as follows in respect of each Interest Period: (A B) + Z A = NMR x LPB x LPD 360 Where: NMR is the Net Mortgage Rate for the preceding Loan Interest Period, LPB is the outstanding principal balance of the Loan as at the first day of the relevant Loan Interest Period; and LPD is the number of days within the relevant Loan Interest Period (and, for the avoidance of doubt, in respect of the first relevant Loan Interest Period, the number of days since the Issue Date). B= C D Where: C = ARI x PAO x IPD

129 And D= Net amounts received by the Issuer under the Basis Swap Agreement Where: ARI is the weighted average of the Rates of Interest (based on the assumption that each Class of Notes will be paid interest at its Relevant Margin) as at such Payment Date (weighted on the basis of the respective Principal Amount Outstanding of such Notes immediately prior to the related Payment Date); PAO is the Principal Amount Outstanding of the Notes as at the first day of the applicable Interest Period; IPD is the number of days within the relevant Interest Period (and, for the avoidance of doubt, in respect of the first Interest Period the number of days since the Issue Date). Z = All amounts which would be available following payment of item (l) of the Issuer Revenue Pre- Enforcement Priority of Payments or, as applicable, item (k) of the Post-Enforcement Priority of Payments on the Payment Date, after payment of all other amounts required to be made by or on behalf of the Issuer on such Payment Date has been made. provided that Retained Interest will never be less than zero. The Net Mortgage Rate for the Loan, with respect to any Payment Date, will be equal to the per annum interest rate on the Loan less the Administrative Cost Rate. The Administrative Cost Rate is equal to a variable rate, which, as of any Payment Date, is the percentage equal to the product of (a) 360 and (b) the fraction obtained by dividing: (i) the Administrative Cost Factor by (ii) the actual number of days in the relevant Interest Period for such Payment Date. The Administrative Cost Rate represents, as of any date of calculation, the per annum rate at which Administrative Fees for any Interest Period accrue against the outstanding principal balance of the Loan. The Administrative Cost Factor is, as of any Payment Date, equal to the percentage obtained by dividing: (a) the Administrative Fees for such Payment Date by (b) the outstanding principal balance of the Loan immediately after the second preceding Loan Payment Date to such Payment Date. The Administrative Fees for any Payment Date will be the amounts payable under items (a) to (d) of the Issuer Revenue Pre-Enforcement Priority of Payments or, as applicable, items (a) to (c) of the Post-Enforcement Priority of Payments plus, in each case, VAT thereon, if properly applicable; provided that Administrative Fees do not include extraordinary, non-recurring fees, costs and expenses such as any swap breakage costs payable by the Issuer under the Basis Swap Agreement, any amounts payable by the Issuer to the Special Servicer or any fees payable by the Issuer to the Servicer (other than Servicing Fees). All interest due under the Senior Facility Agreement will remain payable by the Borrower on the same dates that payments of interest are due and otherwise in accordance with the terms of the Senior Facility Agreement. On each Loan Payment Date Retained Interest, which shall be payable to the Retained Interest Holder but which shall not at that time be capable of calculation, shall (along with all other interest due under the Senior Facility Agreement) be transferred from the relevant Borrower s Accounts to the Transaction Account and, following its calculation and determination by the Servicer pursuant to the Servicing Agreement, such Retained Interest shall on each Payment Date be transferred from the Transaction Account to an account designated by the Retained Interest Holder (for the avoidance of doubt, Retained Interest will not form part of Available Interest Collections or Available Principal Collections and will not be subject to the Priority of Payments). The rights of the Retained Interest Holder and the Issuer as regards Retained Interest will be regulated by the Retained Interest Holder Intercreditor Deed (for further information see The Retained Interest Holder Intercreditor Deed below). Transfer Certificate Pursuant to the Loan Sale Agreement, the Originator and the Issuer will agree to deliver a duly completed transfer certificate to the Facility Agent on or about the Issue Date. Upon execution of the 129

130 otherwise duly executed transfer certificate by the Facility Agent, the Issuer (in its capacity as Lender) and the Borrower shall assume the obligations and acquire the rights against one another (other than rights to receive payment of Retained Interest) set out in the Senior Finance Documents in place of those previously existing between the Originator and the Borrower. Representations and Warranties of the Originator None of the Issuer, the Note Trustee, the Issuer Security Trustee or the Borrower Security Trustee has made or will make any of the enquiries, searches or investigations which a prudent purchaser of the relevant assets would normally make in relation to the Loan or any Related Security. In addition, none of the Issuer, the Note Trustee, the Issuer Security Trustee or the Borrower Security Trustee has made or will make any enquiry, search or investigation at any time in relation to compliance by the Originator, the Servicer, the Special Servicer or any other person with respect to the provisions of the Loan Sale Agreement or the Servicing Agreement or in relation to any applicable laws or the execution, legality, validity, perfection, adequacy or enforceability of the Loan or the Related Security purchased on the Issue Date. In relation to all of the foregoing matters concerning the Loan and the Related Security and the circumstances in which the advances were made to the Borrower prior to the transfer of the Loan to the Issuer, the Issuer, the Note Trustee, the Issuer Security Trustee or the Borrower Security Trustee will rely entirely on the representations and warranties to be given by the Originator to the Issuer, the Note Trustee, the Issuer Security Trustee or the Borrower Security Trustee which are contained in the Loan Sale Agreement. If there is a material breach of any of the following representations and warranties in relation to the Loan or the Related Security, as determined according to the provisions of the Loan Sale Agreement, and such breach is not capable of remedy or, if capable of remedy, has not been remedied within 60 days (or such longer period not exceeding 90 days as the Issuer Security Trustee on behalf of the Issuer may agree), the Originator will be obliged to either: (a) indemnify the Issuer for any loss, claims, demands, expenses, damages or other liabilities by the Issuer as a result of such breach; or (b) repurchase the Loan together with any Related Security from the Issuer for an aggregate amount equal to the outstanding principal amount under the Loan, together with accrued interest, costs and expenses up to, but excluding, the date of the repurchase, if such date is a Payment Date, or, if the date of repurchase is not a Payment Date (and no Note Acceleration Notice has been served), the next Payment Date (less all amounts in the accounts of the Issuer available to pay such amounts), as well as (without duplication) any amounts accrued in relation to the obligation of the Issuer ranking in priority to amounts due to Noteholders under the Conditions of the Notes. The representations and warranties to be given by the Originator in the Loan Sale Agreement on the Issue Date will include statements to the following effect: (a) (b) (c) (d) the information regarding the Loan in the section headed The Loan and Related Property Summaries set forth in this Prospectus is complete, true and accurate in all material respects as at the date of this Prospectus; pursuant to the terms of the Senior Facility Agreement, all payments by the Borrower under the Senior Finance Documents shall be made without (and free and clear of any deduction for) any set-off or counterclaim; the Loan does not contain an obligation to make any further advances which remain to be performed by the Originator on the Issue Date and no part of any advance pursuant to the Loan has been retained by the Originator pending compliance by the Borrower or any other party with any other conditions; each Property is subject to a Land Charge and each Land Charge constitutes a legal, valid, binding and subsisting first ranking (or second-ranking if permitted in the Senior Facility Agreement) (in Division III of the relevant land register) fully perfected Land Charge (Grundschuld) over the related Property in favour of the Borrower Security Trustee and constitutes a legal, valid and binding obligation of, and is enforceable against the Borrower, subject to: (A) general principles of law limiting the same, (B) a status table from a Notary dated 17 October 2006 (the Notary Status Table), and (C) any restrictions regarding Heritable 130

131 Building Rights (owner consent to encumbrance and enforcement) and where registration or recording is pending at the relevant land registry, the Borrower Security Trustee took or is taking all reasonable steps to perfect its title to the Land Charge and has an absolute right to be registered as first mortgagee (or second-ranking if permitted in the Senior Facility Agreement) in the land registry of the Property subject to that Land Charge; (e) the Originator has not received any written notification of any material encumbrance affecting its title to the Loan or its interest in the Related Security; (f) the Loan constitutes the valid and binding obligation of, and is enforceable against, the Borrower, subject to general principles of law limiting the same as set out in the legal opinions referred to in the Senior Finance Documents; (g) (i) the Originator is the sole legal and beneficial owner of the Loan and, subject to any pending registration indicated in respect of any Land Charge, is the sole beneficial owner of the Related Security, free and clear of all Encumbrances; and (ii) so far as the Originator is aware, the Borrower Security Trustee is the sole legal owner of each of the Land Charges, free and clear of all Encumbrances, subject to: (A) the Joint Security Trust Agreement affecting the Borrower Security Trustee s interest in the Land Charges and other Related Security governed by German law in favour of the Finance Parties (which include the Originator); (B) the Loan Security Trust Deed affecting the Borrower Security Trustee s interest in the Related Security in favour of the Finance Parties (which include the Originator); (C) general principles of law limiting the same; and (D) the matters disclosed in the Notary Status Table; (h) the legal and beneficial right, title and interest of the Originator in the Loan and the interest of the Originator in the Related Security may be assigned absolutely, or as the case may be, by operation of law or pursuant to the Senior Finance Documents otherwise transferred to the Issuer and, subject to the reservations set forth in the legal opinions in respect of assignments or other transfers on or about the Issue Date, and such transfer does not violate any provision of the Senior Finance Documents; (i) insofar as the Originator is aware not having made any inquiry of any third party, neither the Originator nor any of the Facility Agent or the Borrower Security Trustee have received written notice that any insurance policy relating to any Property is about to lapse on account of failure by the relevant entity maintaining such insurance to pay the insurance premiums thereunder; (j) the Originator has not received written notice of, and is not aware of (without having made any specific enquiries), the bankruptcy, insolvency, liquidation, receivership, administration, winding up or administrative order made against the Borrower, dissolution or illiquidity (Zahlungsunfähigkeit), over-indebtedness (Überschuldung) or pending illiquidity (drohende Zahlungsunfähigkeit) of the Borrower; (k) as at the Issue Date, the Originator (without having made any enquiry of any third party) is not aware of any material default or material violation in respect of the Senior Facility Agreement or the Related Security which has not been remedied, cured or waived (but only in a case where a reasonably prudent lender of money secured on property would grant such a waiver); (l) the Originator (without having made any enquiry of any third party) is not aware of any litigation or claim calling into question in any material way the Originator s or the Borrower Security Trustee s title to the Loan, the Related Security or any Land Charge; and (m) the Borrower is, as applicable, the owner (Eigentümer) of, or holder of a heritable building right (Erbbauberechtigter) in respect of, the Properties and has unrestricted power to dispose (Verfügungsmacht) of the Properties. No further warranties will be given in relation to the Related Security by the Borrower. Therefore, except to the limited extent of the aforementioned warranties, there can be no assurance that there will be any Related Security for the Loan or, if there is, that the Related Security will be of any value in connection with the enforcement of the Loan or will realise any moneys which can be applied in satisfaction of any amounts outstanding from the Borrower under the Loan. 131

132 Pursuant to the terms of the Loan Sale Agreement, the Originator will disclose against the representations and warranties listed above on the following terms: (a) The sale of the following Properties to the Borrower pursuant to the Real Property Purchase Agreement has not yet been completed as all conditions precedent to such sale have not yet been fulfilled: Bayreuth, Maximilianstraße (WE ); Bottrop, Hansa-Straße 7 (WE ); Hamburg, Osterstraße 111 (WE ); Hamburg, Sachsentor 33/Bergdorfer Schloß (WE ); Neumünster, Großflecken 4-10 (WE ); Trier, Simeonstraße 46 (WE ); Bielefeld, Herforder Straße 9, Stresemannstraße (WE111201); Bonn, Poststraße 23 (WE ); Bremen, Davoserstraße 75/St-Gotth. Straße (WE ); Flensburg, Holm 7 (WE ); Flensburg, Sünderhofenden 10 (WE ); Göttingen, Weender Straße 12/16 (WE ); Leipzig, Merseburger Straße (WE ); München, Bahnhofplatz 7 (WE ); Nürnberg, Fürther Straße (WE ); Nürnberg, Königstraße 14 (WE ); Nürnberg, Vordere Insel Schütt 3 (WE ) and Offenburg, Lindenplatz 3 (WE ). The Purchase Price in respect of each of these Properties was deposited in the Cash Collateral Account upon drawdown under the Loan. (b) Applications for registration of transfer of ownership of the Properties in the relevant land register have been made in respect of all but 25 of the Properties which have been sold to the Borrower. Registration of transfer to the Borrower has occurred in respect of eight Properties. The details of the status of registrations of transfer of ownership are set out in the Notary Status Table, the contents of which are disclosed. (c) Land Charges over 70 Properties have been registered in the relevant land register and, in respect of the remaining Properties, registration of Land Charges has been applied for in respect of all but 15. In respect of all Properties which have been sold to the Borrower, Land Charges have been registered or registration applied for. The details of status of registrations of Land Charges are set out in the Notary Status Table, the contents of which are disclosed. (d) In respect of the following Heritable Building Rights, the Borrower has not yet obtained consent to dispose of those Heritable Building Rights from the relevant land owner (Grundstückseigentümer): Bayreuth, Maximilianstraße (WE ); Bottrop, Hansa-Straße 7 (WE ); Hamburg, Osterstraße 111 (WE ); Hamburg, Sachsentor 33/Bergdorfer Schloß (WE ); Trier, Simeonstraße 46 (WE ); Bielefeld, Herforder Straße 9, Stresemannstraße (WE111201); Göttingen, Weender Straße 12/16 (WE ); München, Bahnhofplatz 7 (WE ); Nürnberg, Königstraße 14 (WE ) and Offenburg, Lindenplatz 3 (WE ). As stated in paragraph (a) above, the sale of these Properties to the Borrower has not yet been completed. (e) The Borrower has not yet obtained the consent of the relevant land owner (Grundstückseigentümer) to register Land Charges over the following Heritable Building Rights: Bayreuth, Maximilianstraße (WE ); Bottrop, Hansa-Straße 7 (WE ); Hamburg, Osterstraße 111 (WE ); Hamburg, Sachsentor 33/Bergdorfer Schloß (WE ); Neumünster, Großflecken 4-10 (WE ); Trier, Simeonstraße 46 (WE ); Bielefeld, Herforder Straße 9, Stresemannstraße (WE111201); Bonn, Poststraße 23 (WE ); Bremen, Davoserstraße 75/St-Gotth. Straße (WE ); Göttingen, Weender Straße 12/16 (WE ); München, Bahnhofplatz 7 (WE ); Nürnberg, Königstraße 14 (WE ); Nürnberg, Vordere Insel Schütt 3 (WE ) and Offenburg, Lindenplatz 3 (WE ). As stated in paragraph (a) above, the sale of these Properties to the Borrower has not yet been completed. 132

133 THE RETAINED INTEREST HOLDER INTERCREDITOR DEED The Originator (in its capacity as original Retained Interest Holder), the Issuer, the Issuer Security Trustee and the Borrower Security Trustee will enter into the Retained Interest Holder Intercreditor Deed, which will regulate the rights of the Retained Interest Holder and the Issuer as regards the payment of Retained Interest. Prior to the occurrence of a Loan Event of Default, Retained Interest will be paid by the Servicer into the Transaction Account and then by the Cash Manager to the Retained Interest Holder in priority to interest payable to the Issuer under the Loan. Following a Loan Event of Default the Issuer will be entitled to be paid interest under the Loan in priority to the payment of Retained Interest to the Retained Interest Holder. The Retained Interest Holder will not be able to initiate any enforcement action until the Issuer is repaid in full (including interest). 133

134 THE SERVICING AGREEMENT Introduction Pursuant to the Servicing Agreement, each of the Issuer, the Retained Interest Holder, the Issuer Security Trustee, the Note Trustee, the Facility Agent and the Borrower Security Trustee will appoint Capmark Services Ireland Limited and Capmark Services UK Limited jointly (subject as otherwise mentioned in this section below, as the Servicer and Capmark Services UK Limited as the Special Servicer to act as their respective agents to administer and to service, or to specially service, as applicable, the Loan and the Related Security. Each of the Facility Agent and the Borrower Security Trustee will delegate substantially all of its administrative functions in relation to the Loan and the Related Security and will act on instructions from the Servicer and the Special Servicer, as applicable, but shall not delegate rights which may only be exercised by it as holder of the Related Security (which the Borrower Security Trustee will agree to exercise only in accordance with the instructions of the Servicer or, in certain circumstances, the Special Servicer or the Note Trustee, as applicable). The Servicer and the Special Servicer will also service Retained Interest on behalf of the Retained Interest Holder. The obligations of Capmark Services Ireland Limited and Capmark Services UK Limited in their capacity as Servicer under the Servicing Agreement will be joint and several obligations provided that, to the extent that the activities required to be carried out by the Servicer constitute regulated investment activities under Irish law, the relevant Servicer will be Capmark Services UK Limited acting alone and the relevant obligations in this regard will be its alone. Servicing Standard Pursuant to the Servicing Agreement, the Servicer and the Special Servicer will agree that in performing the services to be performed under the Servicing Agreement it will act in the best interest of and for the benefit of the Issuer and the Noteholders, in accordance with all applicable laws and regulations, the provisions of the Senior Facility Documents, the Loan Intercreditor Agreement and the Retained Interest Holder Intercreditor Deed and the documents entered into in connection therewith and the terms of the Servicing Agreement and in furtherance thereof and to the extent consistent with such terms, in accordance with the higher of: (a) (b) the same manner in which, and with the same care, skill and diligence that is normal and usual in its United Kingdom and European mortgage servicing and property management activities for similar commercial loans for other third-party portfolios, and the same care, skill and diligence which it would use for commercial mortgage loans in its own portfolio, in each case, giving due consideration to customary and usual standards of practice of institutional commercial loan servicers servicing commercial mortgage loans which are similar to the Loan and the Related Security and with a view to the timely collection of all scheduled payments of principal, interest and all other amounts due under the Loan or, if the Loan comes into and continue in default, and if no satisfactory arrangements can be made for the collection of delinquent payments, the maximisation of the recovery on the Loans to the Issuer, as lenders, and the Retained Interest Holder on a present value basis, but, in either case, without regard to any potential conflicts of interest specified below (the Servicing Standard). In the event that there is a conflict between any of the requirements set forth above, the Servicer or, as the case may be, the Special Servicer, shall apply such requirements in the order of priority in which they appear. The Servicer and the Special Servicer are required to adhere to the Servicing Standard without regard to any fees or other compensation to which they are entitled, any relationship they or any of their affiliates may have with any party to the transactions entered into in connection with the Notes or with the Borrower or any affiliate of the Borrower or the ownership of any Note. Each of the Servicer and the Special Servicer may become the owner or otherwise hold an interest in any Note with the same rights as it would have were it not the Servicer or the Special Servicer, as the case may be. 134

135 Any such interest of the Servicer or the Special Servicer in the Notes will not be taken into account by any person when evaluating whether actions of the Servicer or the Special Servicer were consistent with above standards. Delegation by the Servicer and the Special Servicer Each of the Servicer and the Special Servicer may without the consent of any other person (including without limitation the Issuer, the Facility Agent, the Borrower Security Trustee), subcontract or delegate their respective obligations under the Servicing Agreement. Notwithstanding any subcontracting or delegation of the performance of any of its obligations under the Servicing Agreement, the Servicer or the Special Servicer, as the case may be, shall not be released or discharged from any liability thereunder and shall remain responsible for the performance of its obligations under the Servicing Agreement by any such subcontractor or delegate. Roles of the Servicer and the Special Servicer The Servicer will service and administer the Loan until the occurrence of a Special Servicing Transfer Event. The Special Servicer will formally assume special servicing duties in respect of, and the Loan and the Related Security will become on the occurrence of a Special Servicing Transfer Event a Specially Serviced Loan. A Special Servicing Transfer Event will occur if: (a) (b) a payment default occurs on the Loan on the Loan Final Maturity Date if not extended; any payment required to be made by the Borrower under the Senior Facility Agreement (other than a payment due on the Loan Final Maturity Date) is more than 45 days overdue; (c) a Loan Event of Default occurs due to the Borrower becoming subject to insolvency proceedings or certain other insolvency related events; (d) (e) any security in relation to a Property other than the Related Security is enforced and the Servicer, the Special Servicer or the Borrower Security Trustee, as the case may be, receives a notice thereof; or in the reasonable business judgement of the Servicer, exercised in accordance with the Servicing Standard, any other material Loan Event of Default occurs which is not cured to the satisfaction of the Servicer within the applicable cure period or, which is imminent and not likely to be cured within 45 days, and in either case would be likely to have a material adverse effect upon the Issuer. If the Loan becomes a Specially Serviced Loan, servicing of the Loan will be initiated by the Special Servicer. In the event of enforcement action, the Special Servicer will be required to enforce the terms of the Loan in accordance with the procedures prescribed in the Servicing Agreement and the Senior Finance Documents. The procedures for the enforcement of the Loan terms include the giving of instructions to the Borrower Security Trustee as to how to cause the enforcement of the Related Security in accordance with German law. For a description of the procedure applicable to the enforcement of mortgages in Germany, see Certain Matters of German Law Enforcement of the Land Charges. The Special Servicer will be required under the terms of the Servicing Agreement to observe and to direct the Borrower Security Trustee to take all reasonable measures available to them: (a) to effect or to cause: (i) (ii) the sale of the Properties either by the relevant courts and/or court appointed officials by compulsory sale (Zwangsversteigerung) or otherwise through a private sale; or the enforcement and/or realisation upon the pledges under the Pledge Agreements either by court procedure or private sale, in each case prior to the First Longstop Date, or, if applicable, the Second Longstop Date; and 135

136 (b) in connection with any compulsory administration of any of the Properties (Zwangsverwaltung) to cause the relevant compulsory administrator (Zwangsverwalter) to best preserve the Issuer s rights and to secure any available money from the Properties and to prevent the relevant compulsory administrator from authorising or permitting any construction works to commence on the Properties other than repair or maintenance thereof or the completion of a building or other improvement in respect of which more than 10 per cent. of the budgeted costs have been expended prior to the appointment of the relevant compulsory administrator. The First Longstop Date means the date falling three years after 1 January in the year after the year in which: (a) a Special Servicing Transfer Event commences (to the extent not cured by that date); or (b) enforcement of any part of the Related Security commences, whatever is the earlier. The Second Longstop Date means the date at the end of such period after the First Longstop Date as the Borrower Security Trustee, in consultation with the Special Servicer and each relevant court engaged in the enforcement of the Land Charges, may determine is required for an orderly compulsory sale (Zwangsversteigerung) or other sale of the Properties or enforcement or realisation of the pledges under the Pledge Agreements, as applicable. Full servicing of the Loan and the Related Security after it has become a Specially Serviced Loan will be retransferred to the Servicer if the Loan subsequently becomes a Corrected Loan, which requires that: (a) in relation to a Special Servicing Transfer Event described in paragraph (b) of that definition, such Special Servicing Transfer Event has ceased to exist in relation to the Specially Serviced Loan for two Loan Interest Periods or, if a workout is entered into with respect to the Loan, the Borrower has made two consecutive full and timely quarterly payments under the terms of the Loan as modified in connection with such workout, and (b) in relation to any other Special Servicing Transfer Event, the facts giving rise to such Special Servicing Transfer Event have ceased to exist, and, in each case, no other matter exists which would give rise to the Loan becoming a Specially Serviced Loan. Notwithstanding the appointment of the Special Servicer, the Servicer will be required to continue to collect information and prepare all reports required to be collected or prepared by it under the Servicing Agreement (subject to receipt by it of the required information from the Special Servicer) and to perform certain other day-to-day administrative functions. Neither the Servicer nor the Special Servicer will have responsibility for the performance by the other of its obligations and duties under the Servicing Agreement. Controlling Class The most junior Class of Notes outstanding shall be the Controlling Class if at the relevant time it meets the Controlling Class Test. A Class of Notes will meet the Controlling Class test if it has a total Principal Amount Outstanding which is not less than 25 per cent. of the Principal Amount Outstanding of such Class of Notes on the Issue Date. If the most junior Class of Notes outstanding does not meet the Controlling Class Test, the next most junior Class of Notes outstanding that does meet the Controlling Class Test will be the Controlling Class. If no Class of Notes has a Principal Amount Outstanding that satisfies the Controlling Class Test then the Controlling Class will be the most junior class of Notes then outstanding. For the avoidance of doubt, the Principal Amount Outstanding of a Class of Notes for the purposes of calculating the Controlling Class Test shall be the Principal Amount Outstanding of such Class less any Appraisal Reduction Amounts that have been applied to that Class. The Note Trustee shall determine which Class of Notes meets the Controlling Class Test and shall notify the Servicer and the Special Servicer accordingly. Operating Advisor The Controlling Class may appoint a representative (an Operating Advisor) to represent its interests when the Servicer or the Special Servicer is acting in relation to the Loan. Any Operating Advisor appointed by the Controlling Class will be entitled to require the Issuer to replace the person then acting as the Special Servicer in relation to the Loan (subject to, among other things, the Rating Agencies confirming that the appointment of the nominee will not result in the then current rating assigned to any class or classes of Notes being downgraded, withdrawn or qualified). 136

137 The Servicer or, if at the relevant time the Loan is a Specially Serviced Loan, the Special Servicer must give prior notice to the Operating Advisor if it intends to take certain decisions in relation to the Loan or the Related Security, including any of the following actions: (a) to change the date on which any amount is due to be paid by the Borrower or the timing of any payment; (b) to amend any principal amount or the interest rate payable on the Loan; (c) to extend or bring forward (except in connection with an acceleration of the Loan) the Loan Final Maturity Date; (d) to reduce or waive any amount due under the Senior Facility Agreement including without limitation any interest, principal, prepayment fee, late payment charge or default interest; (e) to permit the Borrower to incur any further indebtedness, other than as permitted by the Loan Documents; (f) to change the currency of any payment due under the Senior Facility Agreement; (g) to release the Borrower from any of its obligations under or in respect of the Loan Documents; (h) to release or substitute any part of the Related Security or any Property (other than in circumstances which are contemplated by the Senior Facility Agreement); or (i) to change the method of calculation of any payment. Following such notice, the Servicer or, as the case may be, the Special Servicer is not permitted to take the relevant action until the earlier of (a) the day falling ten days after the notice and (b) the date on which the Operating Advisor confirms that the Servicer or Special Servicer may proceed in accordance with the proposals contained in such notice. If the Operating Advisor does not respond within such ten day period, its approval will be deemed to have been given and the Special Servicer or the Servicer, as applicable, may take (or direct the Servicer to take) whatever action it reasonably considers necessary in accordance with the Servicing Standard without further approval from the Operating Advisor. If, prior to the day falling ten days after such notice, the Operating Advisor notifies the Servicer or the Special Servicer that it disapproves of the proposed course of action, it must suggest to the Servicer or Special Servicer, as applicable, alternative courses of action. Within ten days thereafter, the Servicer or the Special Servicer are required to submit to the Operating Advisor a revised proposal which must, to the extent that such proposals are not inconsistent with the Servicing Standard, take into account the alternatives suggested by the Operating Advisor. The Servicer or, as applicable, the Special Servicer must continue to revise its proposals in the manner described in the preceding paragraph until the earliest of: (a) the delivery by the Operating Advisor of an approval in writing of such revised proposal; (b) failure by the Operating Advisor to disapprove of such revised proposal in writing by the tenth day after its delivery to the Operating Advisor; and (c) the passage of 30 days from the date of preparation of the first version of the proposal submitted by the Servicer or the Special Servicer (following which the Servicer or the Special Servicer (as applicable) may take such action as it deems appropriate acting in accordance with the Servicing Standard), provided, however, that the Servicer or the Special Servicer, as applicable, will not be obliged to further consult with the Operating Advisor for any action if, for 45 days following the initial notice of the relevant matter, the Operating Advisor has objected to the proposed action or to any revised proposal, as applicable, and has failed to suggest any alternative action that the Servicer or Special Servicer considers consistent with the Servicing Standard. Notwithstanding any right of the Operating Advisor to provide any advice to the Servicer or Special Servicer, or to approve or disapprove of, or right to give advice to or to consent or withhold consent to, any action of the Servicer or Special Servicer, in no event will the Servicer or the Special Servicer, as applicable, be obliged or permitted to take any action or refrain from taking any action that would violate any law of any applicable jurisdiction and/or which would, be, in the opinion of the Servicer or the Special Servicer, as applicable, inconsistent with the Servicing Standard or violate any 137

138 provisions of the Servicing Agreement or the Senior Facility Agreement. In addition, neither the Servicer nor the Special Servicer shall have any liability to any other entity for any action taken, or for refraining from taking any action, or for giving any consent, in each case in accordance with any directions or instructions given by the Operating Advisor to the Servicer or, as the case may be, the Special Servicer. Where there is a conflict between the opinion of the Operating Advisor and the Servicer or Special Servicer, as applicable, the opinion of the Servicer or Special Servicer will prevail, where, in the reasonable opinion of the Servicer or Special Servicer, as applicable, there is a conflict with the Servicing Standard and the other terms of the Servicing Agreement or the Senior Facility Agreement. Nor will the Servicer or the Special Servicer refrain from taking any action pending receipt of any proposals, if the Servicer or the Special Servicer, as applicable, determines in accordance with the Servicing Standard, that immediate action (or action is a shorter time period) is necessary to protect the interest of the Noteholders without waiting for the Operating Advisor s response. The taking of any action prior to the receipt of the Operating Advisor s approval thereof or in a manner which is contrary to the directions of, or disapproved by, the Operating Advisor shall not constitute a breach by the Servicer or the Special Servicer of the Servicing Agreement so long as such action was required by the Servicing Standard. If, in order to comply with the requirements described in this paragraph, the Servicer or the Special Servicer takes action prior to receiving a response from the Operating Advisor and the Operating Advisor objects to such actions within five Business Days after being notified of such action and being provided with all reasonably requested information, the Servicer or, as the case may be, the Special Servicer must (subject always to the foregoing requirements described in this paragraph) take due account of the advice and representations made by the Operating Advisor regarding any further steps that should be taken in the interest if the Noteholders. Annual Review Procedure The Servicer or, in the case of any Specially Serviced Loan, the Special Servicer is required to undertake, at the expense of the Issuer, an annual review in respect of the Borrower and the Loan in accordance with the Servicing Standard. The Servicer or, as the case may be, the Special Servicer is authorised to conduct this review process more frequently, at the expense of the Issuer, if the Servicer or, as the case may be, the Special Servicer, acting in accordance with the Servicing Standard, has cause for concern as to the ability of any Borrower to meet its financial obligations under the Senior Facility Agreement. Such a review (annual or otherwise) may include an inspection of the Properties and will include consideration of the quality of the cash flow arising from the Properties and a compliance check of the Borrower s covenants under the Senior Facility Agreement. Modifications, Waivers, Amendments and Consents The Servicer or, if the Loan is a Specially Serviced Loan, the Special Servicer will be responsible for responding to requests for consent to waivers or modifications relating to the Senior Facility Agreement or the other Borrower Transaction Documents, or to grant any consent requested by the Borrower under the Senior Facility Agreement. The Borrower Security Trustee is required to provide the Servicer or Special Servicer, as applicable, with any request that it receives from the Borrower for a modification, waiver or amendment of a Senior Facility Agreement within three Business Days of receipt of such request together with any relevant information relating to such request which may be reasonably required by the Servicer or Special Servicer, as the case may be, to perform its obligations under the Servicing Agreement. With respect to requests for consents, modifications, waivers or amendments not contemplated by the related Senior Finance Documents or the Loan Intercreditor Agreement and not relating to any of the issues in respect of which the Servicer or Special Servicer must give prior notice to the Operating Advisor as set out in Operating Advisor above, the Servicer or Special Servicer, as appropriate, may exercise its discretion and agree to the request provided that: (a) the granting of consent would be in accordance with the Servicing Standard, and would not violate the terms of the Senior Facility Agreement, the Loan Intercreditor Agreement or the Retained Interest Holder Intercreditor Deed; and 138

139 (b) the consent if granted: (i) (ii) (iii) would, in the reasonable opinion of the Servicer or, as the case may be, the Special Servicer, not have a material adverse effect on the interests of Noteholders; would, in the reasonable opinion of the Servicer or, as the case may be, Special Servicer, produce aggregate greater recovery to the Noteholders on a net present value basis than liquidation of the related Property, as determined by the Servicer or Special Servicer, in accordance with the Servicing Standard; and has been the subject of written confirmation from each Rating Agency that an event that would cause the downgrade, qualification or withdrawal of the then current ratings of any class of Notes (such an event, an Adverse Rating Event) would not occur as a result. The Servicer or, if the Loan is a Specially Serviced Loan, the Special Servicer may agree to any request by the Borrower to provide a consent if the provisions of the Senior Facility Agreement require such consent to be granted provided the conditions to such consent in the Senior Facility Agreement have been satisfied. In granting such consent, the Servicer or the Special Servicer, as applicable, must act in accordance with the Servicing Standard, and the Operating Advisor (if appointed) must be satisfied that the relevant conditions have been met. In the event that the Operating Advisor and the Servicer or, as the case may be, the Special Servicer do not agree that the relevant conditions have been met, the Servicer or, as the case may be, the Special Servicer will prevail. The Servicer and the Special Servicer will each be required to deposit in the relevant mortgage file an original counterpart of any agreement relating to a modification, waiver or amendment agreed to by it promptly following its execution and to forward a copy to the Note Trustee and the Rating Agencies. Upon reasonable prior written notice to the Servicer, copies of each agreement by which any modification, waiver or amendment of any term of the Loan is effected are required to be available for review during normal business hours at the offices of the Servicer. Insurance The Servicer will establish, administer and maintain the arrangements for insurance as required by the Senior Facility Agreement. The Servicer will monitor compliance by the Borrower with the requirements of the Senior Facility Agreement relating to insurance. Pursuant to the terms of the Servicing Agreement, the Servicer is required to use reasonable efforts consistent with the Servicing Standard to monitor the compliance of, and to the extent reasonably practicable, to cause the related Borrower to comply with, the requirements of the related loan documents regarding the maintenance of insurance on the related Properties. In the event that the Servicer (for as long as a Loan is not a Specially Serviced Loan) or the Special Servicer (for as long as a Loan is a Specially Serviced Loan), becomes aware that either: (a) a Property is not covered by a building insurance policy; or (b) a building insurance policy may lapse in relation to a Property due to the non-payment of any premium, the Servicer or the Special Servicer is required, pursuant to the terms of the Servicing Agreement, to use reasonable efforts, subject always to all applicable laws and regulations and consistent with the Servicing Standard to procure that building insurance is maintained for such Property in the form required under the Senior Finance Documents. Such building insurance policy will be paid for by a withdrawal from the B Portfolio Rent Account of an amount necessary to pay all necessary premia (in the case of (a) preceding) or pay to the insurer any unpaid premia, together with any penalties or other charges arising from the related Borrower s failure to timely pay such items (in the case of (b) preceding). However, neither the Servicer nor the Special Servicer is required to pay or instruct payment of any amount described above if, in its reasonable opinion, to do so would not be in accordance with the Servicing Standard. Hedging Arrangements The Servicer will administer and monitor compliance with the requirements of any hedging arrangements entered into by the Issuer in connection with the Basis Swap Agreement. 139

140 Property Protection Advances The Senior Facility Agreement obliges the Borrower to pay certain amounts to third parties, such as insurers and persons providing services in connection with the operation of the Properties. If: (a) the Borrower fails to pay any such amount (and there are insufficient funds available in the relevant Borrower Accounts to pay it); (b) the Senior Facility Agreement entitles the Issuer as lender to pay or discharge the obligation to the third party; (c) the Senior Facility Agreement requires the Borrower to reimburse the Issuer as lender for any payments so made; (d) the Servicer or, as applicable, the Special Servicer is satisfied that such amounts will, in addition to all other amounts due, be recoverable from the relevant Borrower; and (e) the Servicer or, as the case may be, the Special Servicer, is otherwise satisfied that it would be in accordance with the Servicing Standard to do so, the Servicer or Special Servicer, as the case may be, may at its sole discretion make the relevant third party payment (any such payment being a Property Protection Advance) from its own funds. If the Servicer or the Special Servicer makes a Property Protection Advance from its own funds, it will be repaid by the Issuer in accordance with the Pre-Enforcement Priority of Payments or the Post- Enforcement Priority of Payments, as applicable, (subject to the Issuer having sufficient funds) together with interest thereon at EURIBOR plus the Liquidity Margin (the Reimbursement Rate) on the Payment Date immediately following the date on which such Property Protection Advance was made. Valuations The Servicer or, as applicable, the Special Servicer will use reasonable efforts to ensure that each Valuation of the Properties carried out pursuant to the Senior Facility Agreement complies with the following criteria: (a) (b) the valuation is conducted by a reputable independent valuer applying the same standard and methodology used in preparing the Initial Valuation, subject to any deviations as would be acceptable in accordance with the Servicing Standard; and a minimum of 20 of the Properties (including the 20 largest Properties by value owned by the Borrower) must be physically inspected by the Valuer as part of the valuation or, if less than 20 Properties are owned by the Borrower, assets representing at least 50% by value of those properties that are owned by the Borrower based on the value given to those Properties in the Initial Valuation. If the principal amount of the Loan then outstanding (together with any unpaid interest, all currently due and unpaid taxes and assessments, insurance premia due, ground rents due plus any accrued but unpaid interest on such debt) (net of any amount placed into an escrow account in respect of such items), exceeds 90 per cent. of the appraisal value of the Properties as determined by the any such Valuation, an appraisal reduction will be deemed to have occurred in an amount equal to such excess (an Appraisal Reduction). Purchase Right of Servicer Subject to the provisions of Condition 6.4 and the right of the Mezzanine Lender to purchase the Loan as described in The Loan and the Related Security Description of the Mezzanine Facility Agreement and the Intercreditor Arrangements The Intercreditor Arrangements Purchase Option, if, at any time, the Principal Amount Outstanding of all of the Notes is reduced to an amount equal to less than 10 per cent. of their Principal Amount Outstanding as at the Issue Date then, unless the Issuer otherwise elects to redeem the Notes in full pursuant to Condition 6.4, the Servicer has the option to acquire the Loan from the Issuer in the amount necessary for the Issuer to cause a redemption of the Notes in accordance with Condition 6.4), including payment of all interest accrued but unpaid on the Notes. Any purchase by the Servicer of the Loan in connection with such a redemption of the Notes by the Issuer will result in redemption in full of the Notes. Quarterly Reporting The Servicer has agreed to deliver to the Cash Manager and the Special Servicer on each Determination Date, in respect of the preceding Loan Interest Period, a report in respect of the Loan 140

141 setting forth, among other things, quarterly payments on the Loan as well as the tracking of both scheduled and unscheduled payments on the Loan and a check of compliance with the financial covenants in the Senior Facility Agreement. The Servicer has also agreed to provide on each Determination Date a report (a Servicer Quarterly Report) based, where necessary, on information provided to the Servicer by the Special Servicer, with the following information regarding the Loan and the Properties in relation to the immediately preceding Loan Interest Period: (a) (b) (c) (d) the information provided by the Borrower pursuant to the information covenants contained in the Senior Facility Agreement; general information in relation to the Loan including cut-off balance, original mortgage rate, maturity date and general payment information, as well as financial data; information regarding the Properties with respect to disposals, vacancy and capex to the extent received from the relevant Property Manager; and a statement and calculation of (i) the ICR pursuant to the terms of the Senior Facility Agreement, and (ii) the LTV on any Test Date. Other Reporting The Servicer has agreed to deliver to the Issuer, the Retained Interest Holder, the Cash Manager, the Special Servicer, the Borrower Security Trustee, the Issuer Security Trustee and the Note Trustee the following: (a) on the Loan Payment Date immediately following a modification of the Loan, a report setting forth, among other things, the original and revised terms of (i) the Loan as of such Loan Payment Date and (ii) the Loan immediately prior to the Issue Date; and (b) on the Loan Payment Date following a liquidation of the Loan, a report setting forth, among other things, the amount of Liquidation Proceeds and liquidation expenses incurred in connection with the liquidation. The Servicer s ability to provide the reports referred to above may, in the case of a Specially Serviced Loan, depend on the timely receipt of the necessary information from the Special Servicer. Servicing Fee, Special Servicing Fee, Liquidation Fee and Workout Fee On each Payment Date, the Servicer will be entitled to be paid from amounts in the Transaction Account a fee (the Servicing Fee) in arrear on each Payment Date equal to per cent. per annum (plus VAT, if any) of the outstanding principal balance of the Loan at the beginning of the Loan Interest Period to which such Payment Date relates. Following any termination of the Servicer s appointment as Servicer, the Servicing Fee will be paid to any substitute servicer appointed; provided that the Servicing Fee may, with the prior written consent of the Issuer Security Trustee, be payable to any substitute servicer at a higher rate which does not exceed the rate then commonly charged by providers of loan servicing services in relation to commercial properties. The Special Servicer will be entitled to be paid from amounts in the Transaction Account, in accordance with the terms of the Servicing Agreement: (a) a fee (the Special Servicing Fee) equal to 0.18 per cent. per annum (plus VAT, if any) of the outstanding principal amount of the Loan, for each day the Loan is designated as a Specially Serviced Loan. The Special Servicing Fee will be paid in addition to the Servicing Fee. The Special Servicing Fee will accrue on a daily basis over such period and will be payable on each Payment Date commencing with the Payment Date following the date on which such period begins and ending on the Payment Date following the end of such period; (b) a fee (the Liquidation Fee) equal to 0.65 per cent. (plus VAT, if any) of the proceeds of sale, net of costs and expenses of sale, if any, arising from the sale, at any time after the Loan has become a Specially Serviced Loan, of the Loan, the partnership interests in the Borrower or any of the Properties following the enforcement of the Related Security provided the Loan is designated as a Specially Serviced Loan (such proceeds, Liquidation Proceeds). Any Liquidation Fee will be payable in priority to the Notes on the Payment Date following the receipt of Liquidation Proceeds; and 141

142 (c) a fee (the Workout Fee) payable to the Special Servicer, if the Loan first becomes a Specially Serviced Loan and then subsequently becomes a Corrected Loan, in an amount equal to 0.65 per cent. per annum (plus VAT, if any) of each collection of interest and principal received on the Loan, for so long as it remains a Corrected Loan. However, no Workout Fee will be payable if the Special Servicing Transfer Event which gave rise to the Loan becoming Specially Serviced Loan ceased to exist within two weeks of it becoming a Specially Serviced Loan and no other Special Servicing Transfer Event occurred while such Loan remained a Specially Serviced Loan. The Servicing Fee and the Special Servicing Fee will cease to be payable in relation to the Loan if any of the following events (each, a Liquidation Event) occurs in relation to the Loan: (i) (ii) (iii) (iv) the Loan is repaid in full; a Final Recovery Determination is made with respect to the Loan; the Loan is repurchased by the Originator under the Loan Sale Agreement; or the Loan is repurchased by the Servicer in the event that the Principal Amount of all the Notes is reduced to below 10 per cent. of the Principal Amount of all the Notes as of the Issue Date. Final Recovery Determination means a determination by the Special Servicer acting in accordance with the Servicing Standard that as a result of enforcement procedures undertaken in respect of the Loan there has been a recovery of all principal and other payments or recoveries that, in the Special Servicer s judgment, will ultimately be recoverable with respect to the Loan, such judgment to be exercised in accordance with the Servicing Standard. On each Payment Date, the Servicer and the Special Servicer will be entitled to be reimbursed (with interest thereon) in respect of all reasonable out-of-pocket costs, expenses and charges properly incurred by them in the performance of their servicing obligations required under the Servicing Agreement. Such costs and expenses are payable by the Issuer on the Payment Date following the Loan Interest Period during which they are incurred by the Servicer or the Special Servicer and without prejudice to any other rights to payment or, in the case of fees and expenses which are paid directly by the Borrower, immediately on the date which such fees and expenses are collected from the Borrower. To the extent that any amounts are payable by the Issuer to the Servicer or the Special Servicer, such amounts will be payable in accordance with the relevant Priority of Payments in priority to payments of principal and interest on the Notes, both before and after the service of a Note Acceleration Notice. This order of priority has been agreed with a view to procuring the continuing performance by the Servicer and Special Servicer of their respective duties at all times while the Notes are outstanding. Termination of Appointment of Servicer or Special Servicer The Issuer may, with the written consent of the Note Trustee, or, after the service of a Note Acceleration Notice, the Note Trustee may, either in its sole discretion or pursuant to an Extraordinary Resolution of the Noteholders, terminate the appointment of the Servicer or the Special Servicer under the Servicing Agreement upon the occurrence of a termination event, including, among other things, a default in procuring the transfer on any Loan Payment Date of the amounts required to be transferred from the relevant Borrower Account to the Transaction Account under the Servicing Agreement, or, in certain circumstances, a default in performance of certain material covenants or obligations under the Servicing Agreement, or the occurrence of certain insolvency related events in relation to it. The appointment of the person then acting as Special Servicer in relation to the Loan may also be terminated (subject to certain conditions being met) upon the Operating Advisor notifying the Issuer, the Note Trustee and the Issuer Security Trustee that it requires a replacement Special Servicer to be appointed. Each of the Servicer and the Special Servicer may terminate its appointment upon not less than three months notice to each of the Issuer, the Facility Agent, the Note Trustee, the Issuer Security Trustee, 142

143 the Borrower Security Trustees and the Servicer or the Special Servicer (whichever is not purporting to give notice). No termination of the appointment of the Servicer or the Special Servicer, as applicable, will be effective until a qualified substitute servicer or substitute special servicer, as the case may be, shall have been appointed on similar economic term as the original appointment and agreed to be bound by the relevant Transaction Documents, such appointment to be effective not later than the date of termination, and provided further that the Rating Agencies have confirmed that the then applicable ratings of the Notes will not be downgraded, withdrawn or qualified as a result thereof unless save that such confirmation of the Rating Agencies shall not be required if such appointment is agreed by an Extraordinary Resolution of each class of the Noteholders. General Neither the Servicer nor the Special Servicer will be liable for any obligation of the Borrower under the Loan or the Related Security, have any liability for the obligations of the Issuer under the Notes or of the Issuer under the Transaction Documents or the Subscription Agreement or have any liability for the failure by the Issuer to make any payment due by it under the Notes or any of the Transaction Documents or the Subscription Agreement unless such failure by the Issuer results from a failure by the Servicer or the Special Servicer, as the case may be, to perform its obligations under the Servicing Agreement because of negligence or wilful misconduct. Each of the Servicer or the Special Servicer will be entitled to indemnification from the Issuer for any loss, liability or expense, including where applicable, any VAT otherwise not recovered thereon incurred in connection with the performance of its obligations under the Servicing Agreement and any actual or threatened legal action relating to the Transaction Documents, the Subscription Agreement or the Loan, other than any loss, liability or expense incurred by reason of the Servicer s or the Special Servicer s, as applicable, negligence or wilful misconduct. The Servicer and/or the Special Servicer may become the owner or otherwise hold an interest in the Notes with the same rights as it would have if it were not the Servicer or Special Servicer. In assessing whether actions of the Servicer were consistent with the Servicing Standard, no account will be taken of any such interest of the Servicer or the Special Servicer in the Notes. Enforcement of the Notes If so instructed in writing by the Note Trustee and the Issuer Security Trustee, pursuant to Condition 11 (Enforcement), the Special Servicer will, on behalf of the Note Trustee and the Issuer Security Trustee, for as long as the Issuer is not the subject of any insolvency proceedings or examinership, sell or otherwise liquidate (or otherwise direct a receiver, liquidator, administrator, examiner, or other such party, if one has been selected by the Note Trustee, to sell or otherwise liquidate) the Loan and Related Security. Upon the Issuer becoming subject to insolvency proceedings or examinership (or in any other circumstances where the Special Servicer is unable to fulfil its obligations under the preceding paragraph, where the Note Trustee is enforcing the Issuer Security or Issuer German Security) the Note Trustee and the Issuer Security Trustee will: (a) involve the Special Servicer in all discussions relating to the sale or liquidation of that portion of the Issuer Security and Issuer German Security consisting of the Loan and Related Security; and (b) allow the Special Servicer to make all strategic decisions relating to the sale or liquidation of such Issuer Security or Issuer German Security to the extent that either or both of the Note Trustee and the Issuer Security Trustee is involved in such decision making. Subject to the non-petition covenants in the Servicing Agreement, upon an Extraordinary Resolution of each class of the Noteholders directing the same, the Special Servicer s involvement relating to the enforcement of any Issuer Security or Issuer German Security (both before and after the insolvency of the Issuer) shall cease and the Note Trustee and the Issuer Security Trustee shall re-assume sole responsibility for such enforcement. 143

144 THE NOTE TRUST DEED The Note Trustee will be appointed pursuant to the Note Trust Deed as trustee of the Noteholders. The Note Trustee will agree to hold the benefit of the covenants of the Issuer contained in the Note Trust Deed on trust for itself and the Noteholders according to their respective interests. Among other things, the Note Trust Deed: (a) sets out when, and the terms upon which, the Note Trustee will be entitled or obliged, as the case may be, to take steps to enforce the Issuer s obligations under the Notes (or certain other relevant documents); (b) contains various covenants of the Issuer relating to repayment of principal and payment of interest in respect of the Notes, to the conduct of its affairs generally and to certain ongoing obligations connected with its issuance of the Notes; (c) provides for the remuneration of the Note Trustee, the payment of expenses incurred by it in the exercise of its powers and performance of its duties and provides for the indemnification of the Note Trustee against liabilities, losses and costs arising out of the Note Trustee s exercise of its powers and performance of its duties; (d) sets out whose interests the Note Trustee should have regard to when there is a conflict between the interests of different classes of Noteholder; (e) provides that the determinations of the Note Trustee shall be conclusive and binding on the Noteholders; (f) sets out the extent of the Note Trustee s powers and discretions, including its rights to delegate the exercise of its powers or duties to agents, to seek and act upon the advice of certain experts and to rely upon certain documents without further investigation; (g) sets out the scope of the Note Trustee s liability; (h) sets out the terms upon which the Note Trustee may, without the consent of the Noteholders, waive or authorise any breach or proposed breach of covenant by the Issuer or determine that a Note Event of Default or an event which will become a Note Event of Default with the giving of notice or the passage of time shall not be treated as such; (i) sets out the terms upon which the Note Trustee may, without the consent of the Noteholders, make or sanction any modification to the Conditions or to the terms of the Note Trust Deed or certain other relevant documents; and (j) sets out the requirements for and organisation of Noteholder meetings. The Note Trust Deed also contains provisions governing the retirement or removal of the Note Trustee and the appointment of a successor Note Trustee. The Note Trustee may at any time and for any reason resign as Note Trustee upon giving not less than 60 days prior written notice to the Issuer. The holders of the Notes of each class, acting by Extraordinary Resolution, may together remove the Note Trustee from office. No retirement or removal of the Note Trustee (or any successor Note Trustee) will be effective until a trust corporation has been appointed to act as successor Note Trustee. The appointment of a successor Note Trustee shall be made by the Issuer or, where the Note Trustee has given notice of its resignation and the Issuer has failed to make any such appointment by the expiry of the applicable notice period, by the Note Trustee itself. The Note Trust Deed contains provisions requiring the Note Trustee to have regard to the interests of the holders of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes equally as regards all powers, trusts, authorities, duties and discretions of the Note Trustee (except where expressly provided otherwise); provided that if, in the opinion of the Note Trustee, there is a conflict between the interests of the Class A Noteholders (for so long as there are any Class A Notes outstanding) on the one hand and the interests of the Class B Noteholders and/or the Class C Noteholders and/or the Class D Noteholders on the other hand, the Note Trustee shall have regard only to the interests of the Class A Noteholders; (B) if, in the opinion of the Note Trustee, there is a conflict between the interests of the Class B Noteholders (for so long as there are any Class B Notes 144

145 outstanding) on the one hand and the interests of the Class C Noteholders and/or the Class D Noteholders on the other hand, the Note Trustee shall (subject to (A) above) have regard only to the interests of the Class B Noteholders; and (C) if, in the opinion of the Note Trustee, there is a conflict between the interests of the Class C Noteholders (for so long as there are any Class C Notes outstanding) on the one hand and the interests of the Class D Noteholders on the other hand, the Note Trustee shall (subject to (A) and (B) above) have regard only to the interests of the Class C Noteholders; but so that this proviso shall not apply in the case of any powers, trusts, authorities, duties or discretions of the Note Trustee in relation to which it is expressly stated that they may be exercised by the Note Trustee only if in its opinion the interests of the Noteholders of each class would not be materially prejudiced thereby. Except where expressly provided otherwise, so long as any of the Notes remain outstanding, neither the Note Trustee nor the Issuer Security Trustee is required to have regard to the interests of any other persons entitled to the benefit of the Issuer Security and the Issuer German Security. 145

146 THE LIQUIDITY FACILITY AGREEMENT On the Issue Date, the Issuer will enter into the Liquidity Facility Agreement with the Liquidity Facility Provider, the Cash Manager and the Issuer Security Trustee, whereby the Liquidity Facility Provider will provide to the Issuer a 364-day revolving loan facility (the Liquidity Facility) with a maximum aggregate principal amount available for drawdown of A82,600,000 at the Issue Date, which will decrease as the aggregate Principal Amount Outstanding of the Notes decreases provided that it shall not decrease to an amount which is less than 10 per cent. of the initial aggregate principal amount available for drawdown (each such amount the Liquidity Commitment). The maximum aggregate principal amount available for drawdown under the Liquidity Facility may be reduced in other circumstances with the prior written consent of the Issuer and the Issuer Security Trustee PROVIDED THAT the Issuer or the Issuer Security Trustee receives information in writing from the Rating Agencies that such reduction in the maximum amount of the Liquidity Facility will not result in a downgrading of any of the Notes. If an appraisal reduction occurs in relation to the Loan, the amount available to be drawn on any Payment Date under the Liquidity Facility will be reduced by the Liquidity Facility Provider upon notification from the Servicer or the Special Servicer, as applicable, in proportion to the amount expressed as a percentage, equal to the relevant Appraisal Reduction divided by the aggregate appraisal value of all relevant Properties immediately prior to such Appraisal Reduction. The Issuer will make and apply: (a) a drawing on any Payment Date (an Interest Drawing) to fund any shortfall in respect of the Loan (an Interest Shortfall) equal to the amount, if any, by which: (i) the total amount of interest, any mandatory costs and increased costs due to the Issuer on the Loan Payment Date immediately preceding such Payment Date in respect of the Loan exceeds (ii) the total amount received on such Loan Payment Date by the Issuer into the Transaction Account as payment under the Loan (provided, however, that the aggregate Interest Drawings applied toward funding payments of interest on the Class C Notes and the Class D Notes may not exceed A10,900,000); and (b) a drawing on any Business Day (a Revenue Priority Amount Drawing) to fund any shortfall (a Revenue Priority Amount Shortfall) equal to the amount, if any, by which (i) the amount required to pay expenses due to third party creditors of the Issuer identified in items (a) and (c) and (k) of the Issuer Revenue Pre-Enforcement Priority of Payments exceeds (ii) the balance standing to the credit of the Transaction Account. An Interest Shortfall and a Revenue Priority Amount Shortfall are each referred to as a Shortfall. An Interest Drawing and a Revenue Priority Amount Drawing are each referred to as a Liquidity Drawing. The Issuer (or the Cash Manager on its behalf) will make a Liquidity Drawing to fund any Shortfall as determined from time to time by the Cash Manager based, inter alia, on information provided by the Servicer or the Special Servicer as applicable. The Issuer will, on each Business Day that Revenue Receipts consisting of late payments under the Loan received after the related Liquidity Drawing are or remain credited to the Transaction Account, pay such Revenue Receipts in or towards pre-paying such Liquidity Drawing. The Liquidity Facility Agreement will provide that if at any time any of the ratings of the short-term, unsecured, unsubordinated and debt obligations of the Liquidity Facility Provider fall below the Minimum Liquidity Facility Provider Ratings, or the Liquidity Facility Provider refuses to extend the commitment period of the Liquidity Facility, then the Issuer (or the Cash Manager on its behalf) will require the Liquidity Facility Provider to pay into a designated bank account of the Issuer (the Standby Account) maintained with an appropriately rated bank an amount (a Standby Drawing) equal to its undrawn Liquidity Commitment under the Liquidity Facility Agreement. If the Issuer makes a Standby Drawing, the Cash Manager (on behalf of the Issuer) will, prior to the expenditure of the proceeds of such drawing as described above, invest such funds in Eligible Investments. Amounts standing to the credit of the Standby Account will be available to the Issuer to be drawn in the same circumstances as the Liquidity Drawings, as described above, and otherwise in the circumstances provided in the Liquidity Facility Agreement. 146

147 Liquidity Drawings will bear interest payable to the Liquidity Facility Provider at a per annum rate equal to the sum of EURIBOR (as determined in relation to the Notes) plus a specified margin per annum plus mandatory costs plus any applicable increased costs (each as defined in the Liquidity Facility Agreement). All payments due to the Liquidity Facility Provider in respect of amounts drawn by the Issuer pursuant to the terms of the Liquidity Facility Agreement will be repayable to the Liquidity Facility Provider (together with, among other things, any interest thereon) in point of priority ahead of payments of interest on the Notes. If a Liquidity Drawing is not repaid on the relevant Payment Date as described above, the amount outstanding under the Liquidity Facility will be deemed to be repaid (but only for the purposes of the Liquidity Facility) and redrawn on such Payment Date in an amount equal to all amounts outstanding. This procedure will be repeated on each subsequent Payment Date, up to the amount of the Liquidity Commitment, until all amounts outstanding are paid and/or repaid. The Issuer will pay interest on any Liquidity Standby Drawings at an amount equal to the commitment fee under the Liquidity Facility Agreement that would be paid had the Liquidity Standby Drawing not been made plus an amount equal to any interest earned on amounts standing to the credit of the Liquidity Standby Account following the date of the Liquidity Standby Drawing and the interest element of any proceeds of any Liquidity Eligible Investments made out of amounts standing to the credit of the Liquidity Standby Account. The Liquidity Facility Provider Lloyds TSB Bank plc, acting through its office at 10 Gresham Street, London EC2V 7AE will be appointed to act as Liquidity Facility Provider pursuant to the terms of the Liquidity Facility Agreement. The Liquidity Facility Provider is engaged in the business of providing commercial banking services, including providing credit facilities similar to the facilities provided by it pursuant to the Liquidity Facility Agreement. As at the date of this Prospectus, the long-term, unsecured unsubordinated debt obligations of the Liquidity Facility Provider are rated AA+ by Fitch, AAA by Moody s and AA by S&P, and the short term, unsecured, unsubordinated debt obligations of the Liquidity Facility Provider are rated F1+ by Fitch, P-1 by Moody s and A-1+ by S&P. The information contained herein with respect to Lloyds TSB Bank plc has been obtained from it. Delivery of this Prospectus shall not create any implication that there has been no change in the affairs of Lloyds TSB Bank plc since the date hereof or that the information contained or referred to herein is correct as of any time subsequent to this date. 147

148 THE BASIS SWAP AGREEMENT On or before the Issue Date, the Issuer will enter into a swap transaction with the Basis Swap Counterparty, in each case documented under the Basis Swap Agreement by means of one or more swap confirmations each of which will supplement, amend, form part of and be subject to the Basis Swap Agreement. The EURIBOR rate which is a component of interest payable by the Borrower on the Loan on each Loan Interest Payment Date will not match the EURIBOR rate of interest payable by the Issuer under the Notes on each Payment Date exposing the Issuer to a potential basis rate risk. In order to mitigate these risks the Issuer will enter into a basis rate swap transaction (the Basis Swap Transaction) pursuant to which on each Payment Date the Issuer will pay to the Basis Rate Swap Counterparty amounts calculated using the EURIBOR rate of interest payable on the Loan and will receive from the Basis Rate Swap Counterparty amounts calculated using the EURIBOR rate of interest payable under the Notes. Any Basis Swap Transaction may be terminated in accordance with certain Events of Default and Termination Events (each as defined in the Basis Swap Agreement) including (without limitation) (a) if a Note Acceleration Notice is served pursuant to Condition 10.1 (Eligible Noteholders) of the Notes; (b) if the Notes are redeemed in full pursuant to Condition 6.3 (Optional Redemption for Tax or Other Reasons) orcondition 6.4 (Optional Redemption in Full) of the Notes; (c) if, following an amendment to the Pre-Enforcement Priority of Payments or the Post-Enforcement Priority of Payments, the Issuer s obligations to the Basis Swap Counterparty are further contractually subordinated than prior to such amendment; (d) if a Loan and other amounts outstanding under the senior finance documents related to such Loan have been unconditionally and irrevocably paid and discharged in full; or (e) if in respect of a Loan, notice is served under the related Senior Facility Agreement or, notice having been served, a demand is made. If either (a) the Notes are redeemed pursuant to Condition 6.2 (Mandatory Redemption from Available Principal Collections) or the Notes are reduced pursuant to Condition 6.7 (Appraisal Reductions); or (b), as a result of any unscheduled repayment or prepayment in part of a Loan, the notional amount of a Basis Swap Transaction relating to such Loan exceeds the revised scheduled principal amount of the Loan for the corresponding Interest Period then the terms of the Basis Swap Transaction shall be adjusted such that the notional amount is equal to the principal amount outstanding for the corresponding Interest Period and a mark-to-market amount (if any) will become payable between the parties. In the event that the Issuer is required to withhold or deduct an amount in respect of tax from payments due from it to a Basis Swap Counterparty, the Issuer will not be required pursuant to the terms of the Basis Swap Agreement to pay the Basis Swap Counterparty such amounts as would have been required to ensure that such Basis Swap Counterparty received the same amounts that it would have received had such withholding or deduction not been made. In the event that the Basis Swap Counterparty is required to withhold or deduct an amount in respect of tax from payments due from it to the Issuer, the Basis Swap Counterparty will be required pursuant to the terms of the Basis Swap Agreement to pay to the Issuer such additional amounts (the Gross-up Amount) as are required to ensure that the Issuer receives the same amounts that it would have received had such withholding or deduction not been made, provided that in the event that the Issuer receives any tax credit, allowance, set-off or payment in respect of all or any part of the Gross-up Amount from any taxing authority, the Issuer shall pass such amount on to the Basis Swap Counterparty to the extent that it would leave the Basis Swap Counterparty in the same position had it not paid the Gross-up Amount. If the long-term, unsecured, unsubordinated debt obligations of the Basis Swap Counterparty cease to be rated at least A- by S&P or A1 by Moody s (the Minimum Basis Swap Counterparty Ratings) or any such rating is withdrawn by S&P or Moody s the Basis Swap Agreement will require the Basis Swap Counterparty, within 30 days of the occurrence of such downgrade at the cost of the Basis Swap Counterparty, to: (a) procure a replacement basis rate swap provider with the applicable Minimum Basis Swap Counterparty Ratings or such other rating as is commensurate with the ratings assigned to the Notes by the Rating Agencies from time to time; or 148

149 (b) procure another person with the applicable Minimum Basis Swap Counterparty Ratings to become guarantor or co-obligor in respect of its obligations under the Basis Swap Agreement; or (c) take such other action as the Basis Swap Counterparty may agree with the Rating Agencies as will result in the ratings of the Notes being maintained at, or restored to, the level they were at immediately prior to such downgrade or withdrawal; or (d) in accordance with the provisions of the relevant credit support annex (a Basis Swap Agreement Credit Support Document) deliver to the Issuer Security Trustee collateral in respect of its obligations under the Basis Swap Transaction in an amount or value determined in accordance with the swap collateral requirements of the Rating Agencies. In the event that the rating of the Basis Swap Counterparty falls below the Minimum Basis Swap Counterparty Ratings to a further specified level, the option of posting collateral will be subject to certain conditions or may no longer be available to the Basis Swap Counterparty. If the Basis Swap Counterparty fails to take one of the above-mentioned remedial measures within the time prescribed, then the Issuer will be entitled to terminate the Basis Swap Agreement. However, in the event that the Issuer were to terminate the Basis Swap Agreement in such circumstances and there would be a payment due to the Basis Swap Counterparty, the Issuer may only terminate the Basis Swap Agreement if it has found a suitable replacement swap counterparty. If the Basis Swap Transaction is terminated in whole, either the Basis Swap Counterparty, on the one hand, or the Issuer, on the other hand, as the case may be, may be required to pay an amount to the other party as a result of such termination. Any such payment by the Issuer shall be made in accordance with the Pre-Enforcement Priority of Payments and the Post-Enforcement Priority of Payments. If the Basis Swap Transaction is terminated due to the occurrence of an Event of Default (as defined in the Basis Swap Agreement) in respect of the Basis Swap Counterparty (such event, a Basis Swap Trigger) any payment due from the Issuer will be made pursuant to item (k) of the Issuer Revenue Pre-Enforcement Priority of Payments or, as applicable, item (j) of the Post-Enforcement Priority of Payments. Any payment by the Issuer to the Basis Swap Counterparty under the Basis Swap Agreement prior to the occurrence of a Basis Swap Trigger will be made pursuant to item (e) of the Issuer Revenue Pre-Enforcement Priority of Payments or, as applicable, item (e) of the Post- Enforcement Priority of Payments. Where the Basis Swap Counterparty provides collateral (the Basis Swap Collateral) in accordance with the terms of the Basis Swap Agreement, such collateral will, upon receipt by the Issuer, be credited to a separate ledger (created to record such amounts) and transferred (if in cash form) to a cash account in the name of the Issuer with the Issuer Account Bank or (if not in cash form) to a custody account in the name of the Issuer. Any Basis Swap Collateral shall not form part of the Available Interest Collections or amounts available for distribution under the Post-Enforcement Priority of Payments other than collateral amounts applied in satisfaction of termination payments due to the Issuer following the designation of an early termination date under the Basis Swap Agreement. The Basis Swap Counterparty may, with the prior written consent of the Issuer and the Security Trustee, novate its rights and obligations under the Basis Swap Agreement to any third party entity (a Transferee), provided: (i) such Transferee has the Minimum Basis Swap Counterparty Ratings, (ii) the Transferee will not, as a result of the transfer, be required to withhold or deduct on account of tax; (iii) no Event of Default or Termination Event will occur as a result of such transfer; (iv) no additional amount will be payable by the Issuer to the Basis Swap Counterparty or the Transferee as a result of such transfer; and (v) (if the Transferee is domiciled in a different jurisdiction from the Issuer and the Basis Swap Counterparty) the Rating Agencies have confirmed that the then current ratings of the Notes will not be adversely affected by the transfer. If the Issuer receives any premium or upfront payment from a replacement swap counterparty in respect of a replacement basis swap transaction, such amount will not form part of the Available Interest Collections or amounts available for distribution under the Post Enforcement Priority of Payments but will be paid directly to the Basis Swap Counterparty to the extent of the termination payment due to the Basis Swap Counterparty under the Basis Swap Agreement. 149

150 The Issuer may apply swap termination payments received, if any, from the Basis Swap Counterparty towards consideration for a suitably rated replacement swap provider entering into a suitable replacement Basis Swap Agreement, where applicable. The Basis Swap Agreement will be governed by English Law. 150

151 THE CASH MANAGEMENT AND ISSUER ACCOUNT BANK AGREEMENT Cash Manager Pursuant to the terms of an agreement to be dated on or about the Issue Date (the Cash Management and Issuer Account Bank Agreement) between the Issuer, the Servicer, the Special Servicer, the Issuer Security Trustee, the Cash Manager, the Issuer Account Bank and the Retained Interest Holder, each of the Issuer and the Issuer Security Trustee (according to their respective interests) will appoint Deutsche Bank AG, London Branch as the Cash Manager to provide certain cash management services on behalf of the Issuer. The Cash Manager will undertake to comply with any directions given by or on behalf of the Issuer or the Issuer Security Trustee in accordance with the Cash Management and Issuer Account Bank Agreement. Transaction Account Pursuant to the Cash Management and Issuer Account Bank Agreement, the Issuer Account Bank will open and maintain an account in the name of the Issuer (the Transaction Account and together with the Standby Account, the Issuer Accounts) into which will be deposited all amounts of principal and interest paid by the Borrower under the Loan including, among other things, all amounts transferred to the Issuer from the Rent Account and any prepayments of principal, all Liquidity Drawings (other than Standby Drawings) and all proceeds of enforcement of the Related Security (but for the avoidance of doubt excluding Prepayment Fees). The Borrower Security Trustee, pursuant to the Senior Facility Agreement, agrees that if it enforces the Related Security, it will immediately deposit all of such proceeds into the Transaction Account, which account is subject to a security interest in favour of the Issuer Security Trustee. The Cash Manager will make all payments required and will operate the Transaction Account in accordance with the terms of the Cash Management and Issuer Account Bank Agreement and the information given to it by the Servicer or, as applicable, the Special Servicer. Subject to the following sentence, on each Loan Payment Date, the Facility Agent or the Borrower Security Trustee, as applicable, under the Senior Facility Agreement, at the direction of the Servicer or the Special Servicer, as applicable, will, to the extent funds are available, transfer from the Rent Account to the Transaction Account, all amounts of interest and principal due to the Issuer and all prepayments under the Senior Facility Agreement, and will distribute all other amounts standing to the credit of the relevant Borrower Account as required by the Senior Facility Agreement. On each Loan Payment Date Retained Interest, which shall be payable to the Retained Interest Holder but which shall not at that time be capable of calculation, shall (along with all other interest due under the Senior Facility Agreement) be transferred from the relevant Borrower s Accounts to the Transaction Account and, following its calculation and determination by the Servicer pursuant to the Servicing Agreement, such Retained Interest shall on each Payment Date be transferred from the Transaction Account to an account designated by the Originator and or any assignee (the Retained Interest Holder) (for the avoidance of doubt, Retained Interest will not form part of Available Interest Collections or Available Principal Collections and will not be subject to the Priority of Payments). The repayment of principal and payment of interest by the Borrower under the Loan along with payments by the Basis Swap Counterparty and Liquidity Drawings will provide the principal source of funds for the Issuer to make repayments of principal and payments of interest in respect of the Notes. On each Determination Date, the Cash Manager will calculate the amount of any Liquidity Drawings which will be required to be made on the following Payment Date, and the Cash Manager will also be required to calculate and/or determine, based on and subject to receipt of information to be provided to it by the Servicer and/or the Special Servicer, the following: (a) (b) the amount of Available Interest Collections and Available Principal Collections received during the Interest Period to which such Determination Date relates; and all amounts due according to the Issuer Principal Pre-Enforcement Priority of Payments and the Issuer Revenue Pre-Enforcement Priority of Payments. 151

152 Available Interest Collections means, as at a Payment Date, an amount equal to the aggregate of: (a) the Revenue Receipts standing to the credit of the Transaction Account at the close of business on the day immediately prior to the Determination Date applicable to such Payment Date; (b) the net amounts paid or due to be paid to the Issuer under the Basis Swap Agreement in respect of the Interest Period to which that Determination Date relates other than (i) collateral transferred to the Issuer thereunder (excluding amounts applied in satisfaction of termination payments due to the Issuer following the designation of an early termination date under the Basis Swap Agreement); (ii) any termination payment paid by the Basis Swap Counterparty to the Issuer to the extent such termination payment is paid to a suitably rated replacement swap provider in consideration for such swap provider entering into a suitable replacement swap agreement (Available Interest Collections shall also, for the avoidance of doubt, include any swap breakage costs paid by the Basis Swap Counterparty to the Issuer following the occurrence of a prepayment under the Loan), (iii) any Swap Tax Credit Amounts and (iv) any Replacement Swap Premium; (c) drawings made by the Issuer (or the Cash Manager on its behalf) pursuant to the terms of the Liquidity Facility Agreement; (d) any interest accrued upon and paid to the Issuer on the Transaction Account and the Standby Account; and (e) the income from any Eligible Investments and the principal proceeds of any realisation of any Eligible Investments to the extent that any corresponding principal amount invested is derived from other Available Interest Collections. Gross-up Amount means any additional amounts that the Basis Swap Counterparts is required to pay to the Issuer to compensate for any withheld or deducted amounts on account of tax to ensure that the Issuer receives the same amount had such withholding or deduction not been made. On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable, Interest will be paid on the Notes out of the Available Interest Collections. The Available Interest Collections will be applied as follows by the Issuer and/or the Cash Manager (Issuer Revenue Pre-Enforcement Priority of Payments): (a) first, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof, of the fees or other remuneration of (and amounts payable in respect of indemnity protection) and any costs, charges, liabilities and expenses incurred by the Note Trustee and the Issuer Security Trustee, respectively, and, in each case, the appointees thereof; (b) second, in or towards payment to the Issuer of A625 per annum (the Issuer s Profit) to be retained as profit and distributed by the Issuer; (c) third, pro rata and pari passu in or towards satisfaction of (i) the amounts, including audit fees, fees due to the stock exchange where the Notes are then listed, fees due to Rating Agencies and company secretarial expenses, which are payable by the Issuer to third parties and incurred without breach by the Issuer of the Note Trust Deed, the Issuer Deed of Charge and Assignment or the German Security Assignment Agreement and not provided for payment elsewhere and to provide for any such amounts expected to become due and payable by the Issuer after that Payment Date and to provide for the Issuer s liability or possible liability for tax; (ii) all amounts due to the Corporate Services Provider; (iii) all amounts due to the Servicer or the Special Servicer under the Servicing Agreement (other than any Liquidation Fee or any Workout Fee unless deducted from a payment of interest); (iv) all amounts due to the Issuer Account Bank under the Cash Management and Issuer Account Bank Agreement; (v) all amounts due to the Cash Manager under the Cash Management and Issuer Account Bank Agreement; and (vi) all amounts due to the Paying Agents and the Agent Bank under the Agency Agreement; (d) fourth, in or towards all amounts of principal, interest and commitment fees due or accrued but unpaid to the Liquidity Facility Provider under the Liquidity Facility Agreement (other than Liquidity Subordinated Amounts) including amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to the commitment fee as a result of the 152

153 (e) (f) (g) (h) (i) (j) (k) (l) Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider to the extent that all such amounts are not Liquidity Subordinated Amounts; fifth, in or towards satisfaction of all amounts due or overdue to the Basis Swap Counterparty under the Basis Swap Agreement other than (i) any Swap Tax Credit Amount and/or any Replacement Swap Premium (which will be paid directly to the Basis Swap Counterparty) or any collateral transferred pursuant to the Basis Swap Agreement and/or (ii) Basis Swap Subordinated Amounts; sixth, in or towards satisfaction pro rata and pari passu of interest due or overdue on the Class A Notes; seventh, in or towards satisfaction pro rata and pari passu of interest due or overdue on the Class B Notes; eighth, in or towards satisfaction pro rata and pari passu of interest due or overdue on the Class C Notes; ninth, in or towards satisfaction pro rata and pari passu of interest due or overdue on the Class D Notes; tenth, in or towards satisfaction of Liquidity Subordinated Amounts; eleventh, in or towards satisfaction of any Basis Swap Subordinated Amounts; twelfth, in or towards payment of any amounts payable by the Issuer to the Originator under the Loan Sale Agreement (to the extent not already provided for); and (m) thirteenth, the surplus, if any, to the Issuer. Basis Swap Subordinated Amount means any termination amount due to the Basis Swap Counterparty as a result of the occurrence of a Basis Swap Trigger (as defined below in Description of the Transaction Documents The Basis Swap Agreement ). Liquidity Subordinated Amounts means amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to the commitment fee as a result of the implementation of the Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider (excluding any amounts paid to the Liquidity Facility Provider under item (d) of the Issuer Revenue Pre-Enforcement Priority of Payments) and any additional percentage in aggregate in excess of 0.2 per cent. per annum on the maximum aggregate amount available to be drawn on the Liquidity Facility Agreement. Scheduled Amortisation Amount means, in respect of any Determination Date, the aggregate amount of principal received by or on behalf of the Issuer during the Collection Period then ended by way of a required amortisation instalment under the Loan (for the avoidance of doubt, this amount does not include any final required repayment instalment of the Loan). Available Principal Collections means in respect of any Determination Date, the aggregate of (i) the Pro Rata Redemption Amount and (ii) the Sequential Redemption Amount. Release Premium Amount means, in respect of any Determination Date, the aggregate amount of principal prepayments received by or on behalf of the Issuer during the Collection Period then ended of all or part of the Loan that represent Release Amount Differential paid by the Borrower in respect of a disposal of all or part of a Property. The following is a Sequential Payment Trigger: (a) A Loan Event of Default (based on the terms of the Senior Facility Agreement) as at the Issue Date and without regard to any subsequent amendments to the Senior Facility Agreement or waivers granted in respect thereof has occurred, provided that a Loan Event of Default shall not be deemed to have occurred for the purposes of this definition if: (i) the Loan Event of Default is with respect to payment and such default has been remedied or cured within 5 Business Days of such default; and/or 153

154 (ii) the Loan Event of Default is other than a Loan Event of default described in (i) above, and the Loan Event of Default is capable of being remedied or cured within 30 days of such default being notified in accordance with the terms of the Senior Facility Agreement; (b) there has been a failure to pay interest when due on any Note (other than the Most Senior Class of Notes then outstanding); or (c) the occurrence of any Payment Date falling in or after July Pro Rata Redemption Amount means an amount, as calculated on each Determination Date prior to the occurrence of a Sequential Payment Trigger, equal to: (a) the sum of all collections received by the Issuer in respect of principal repayments or prepayments on the Loan during the Collection Period immediately preceeding such Determination Date, other than the Sequential Redemption Amount; less (b) any Liquidation Fee due and payable in respect of the Loan and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period, each in accordance with and pursuant to the terms of the Servicing Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount). Sequential Redemption Amount means an amount, as calculated on each Determination Date equal to: (a) the sum of all Scheduled Amortisation Amounts and all Release Premium; less (b) any Liquidation Fee due and payable in respect of the Loan (to the extent not paid from the Pro Rata Redemption Amount) and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period (to the extent not payable from the Pro Rata Redemption Amount), each in accordance with and pursuant to the terms of the Servicing Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount). Pro Rata Redemption of Notes On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and prior to the occurrence of a Sequential Payment Trigger, the Issuer, or the Cash Manager on its behalf, will apply the Pro Rata Redemption Amount in redeeming each Class of Notes pro rata and pari passu according to their respective Principal Amounts Outstanding (calculated for the avoidance of doubt, before the application on such Payment Date of the Sequential Redemption Amount) until each Class A Note, Class B Note, Class C Note and Class D Note has been redeemed in full (the Pro Rata Redemption of Notes). Issuer Sequential Principal Priority of Payments On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and prior to the occurrence of a Sequential Payment Trigger and following application of the Pro-Rata Redemption Amount as set forth immediately above, the Issuer, or the Cash Manager on its behalf will apply the Sequential Redemption Amount in the following order of priority (the Issuer Sequential Principal Priority of Payments and, together with the Pro Rata Redemption of the Notes, the Issuer Principal Pre-Enforcement Priority of Payments): (a) (b) (c) first, to redeem the Class A Notes, pro rata and pari passu without preference amongst themselves, until the Class A Notes have been redeemed in full at their Principal Amount Outstanding; second, to redeem the Class B Notes, pro rata and pari passu without preference amongst themselves, until the Class B Notes have been redeemed in full at their Principal Amount Outstanding; third, to redeem the Class C Notes, pro rata and pari passu without preference amongst themselves, until the Class C Notes have been redeemed in full at their Principal Amount Outstanding; and 154

155 (d) fourth, to redeem the Class D Notes, pro rata and pari passu without preference amongst themselves, until the Class D Notes have been redeemed in full at their Principal Amount Outstanding. Sequential Payment Trigger On each Payment Date prior to the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable and following the occurrence of a Sequential Payment Trigger, the Issuer, or the Cash Manager on its behalf, will apply all Available Principal Collections in accordance with the Issuer Sequential Principal Priority of Payments. Post-enforcement Priority of Payments Following the service of a Note Acceleration Notice or the Issuer Security otherwise becoming enforceable, the Issuer Security Trustee will apply all monies and receipts received by the Issuer and/ or the Issuer Security Trustee or any receiver appointed by it in respect of the Issuer Security (other than any Replacement Swap Premium and/or Swap Tax Credit Amount (each of which will be paid directly to the Basis Swap Counterparty) or any Basis Swap Collateral or amounts standing to the credit of the Stand-by Account (if any) or the Issuer Share Capital Account) or the Issuer German Security (whether of principal or interest or otherwise) in the following manner and order of priority (the Post-Enforcement Priority of Payments and, together with the Pre-Enforcement Priority of Payments, the Priority of Payments) (in each case only if and to the extent that payments of a higher priority have been made in full): (a) first, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof, of the costs, expenses, fees or other remuneration and indemnity payments (if any) payable to the Note Trustee or any of its appointees and the Issuer Security Trustee or any of its appointees (including any receiver appointed by the Issuer Security Trustee) and any costs, charges, liabilities and expenses incurred by the Note Trustee or the Issuer Security Trustee or any of its appointees (including any receiver); (b) second, pro rata and pari passu in and towards the satisfaction of (i) all amounts due to the Issuer Account Bank under the Cash Management and Issuer Account Bank Agreement, (ii) all amounts due to the Cash Manager under the Cash Management and Issuer Account Bank Agreement and (iii) all amounts due to the Principal Paying Agent, the Irish Paying Agent and the Agent Bank under the Agency Agreement (iv) all amounts due to the Corporate Services Provider and (v) all amounts due to the Servicer or the Special Servicer under the Servicing Agreement; (c) third, pro rata and pari passu in or towards satisfaction of all amounts of principal, interest and commitment fees due or accrued due but unpaid to the Liquidity Facility Provider under the Liquidity Facility Agreement (other than Liquidity Subordinated Amounts) including amounts in respect of withholding taxes or increased costs (including, for the avoidance of doubt, increases to the commitment fee as a result of the Basel II Capital Accord) and other amounts payable under the Liquidity Facility Agreement to the Liquidity Facility Provider to the extent that all such amounts are not Liquidity Subordinated Amounts; (d) fourth, pro rata and pari passu in or towards satisfaction of all amounts due or overdue to the Basis Swap Counterparty under the Basis Swap Agreement (other than the Basis Swap Subordinated Amounts); (e) fifth, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof of: (i) all interest due or overdue on the Class A Notes; and (ii) after payments of all such sums in paragraph (e)(i) above, all amounts of principal outstanding on the Class A Notes until all of the Class A Notes have been redeemed in full; (f) sixth, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof of: (i) all interest due or overdue on the Class B Notes; and 155

156 (ii) after payments of all such sums in paragraph (f)(i) above, all amounts of principal outstanding on the Class B Notes until all of the Class B Notes have been redeemed in full; (g) seventh, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof of: (i) (ii) all interest due or overdue on the Class C Notes; and after payments of all such sums in paragraph (g)(i) above, all amounts of principal outstanding on the Class C Notes until all of the Class C Notes have been redeemed in full; (h) eighth, in or towards satisfaction on a pro rata and pari passu basis according to the respective amounts thereof of: (i) (ii) all interest due or overdue on the Class D Notes; and after payments of all such sums in paragraph (h)(i) above, all amounts of principal outstanding on the Class D Notes until all of the Class D Notes have been redeemed in full; (i) (j) (k) (l) ninth, in or towards satisfaction of any Liquidity Subordinated Amounts; tenth, on a pro rata and pari passu basis, in or towards satisfaction of all Basis Swap Subordinated Amounts; eleventh, in or towards payment of any amounts payable by the Issuer to the Originator under the Loan Sale Agreement (to the extent not already provided for); and twelfth, the surplus, if any, to the Issuer or other persons entitled thereto. For the avoidance of doubt, the amounts available to the Noteholders on the enforcement of the Issuer Security will not include the amounts standing to the credit of the Standby Account. The Issuer Security Trustee will (following enforcement of the Issuer Security) pay the amount (if any) standing to the credit of the Standby Account to the Liquidity Facility Provider. Issuer Share Capital Account The Issuer has also established an account (the Issuer Share Capital Account) for the purpose of holding the proceeds of the issued share capital of the Issuer and any fees generated by the Issuer as a result of entering into the transaction. Issuer Account Bank and Establishment of Issuer Accounts The Issuer Account Bank must, pursuant to the terms of the Cash Management and Issuer Account Bank Agreement, be an entity the short-term unguaranteed, unsecured and unsubordinated debt obligations of which are rated A-1+ by S&P, P-1 by Moody s and F1+ by Fitch (the Requisite Rating) or, if at the relevant time there is no such entity, any entity approved in writing by the Rating Agencies (an Authorised Entity). Standby Account Any Standby Drawing that the Issuer may require from the Liquidity Facility Provider will be credited to an account in the name of the Issuer (the Standby Account) with the Issuer Account Bank. If the Issuer Account Bank ceases to be an Authorised Entity, the Standby Drawing shall be transferred by the Issuer within 30 calendar days of the Issuer Account Bank ceasing to be an Authorised Entity to an account with the Liquidity Facility Provider or, if the Liquidity Facility Provider is not at that time, or thereafter ceases to be an Authorised Entity (and within 30 days thereof), any bank which is an Authorised Entity. Investment of Funds The funds held in the Transaction Account and the Standby Account may be invested in Eligible Investments. 156

157 Any Eligible Investments will be charged by the Issuer in favour of the Issuer Security Trustee (on behalf of itself and the other Issuer Secured Creditors) pursuant to the terms of the Issuer Deed of Charge and Assignment, in the case of the Transaction Account and the Standby Account. Eligible Investments means (a) euro demand or time deposits, certificates of deposit and short-term debt obligations (including commercial paper); provided that in all cases such investments will mature at least one business day prior to the next Payment Date in an amount at least equal to the principal invested and the short-term unsecured, unguaranteed and unsubordinated debt obligations of the issuing or guaranteeing entity or the entity with which the demand or time deposits are made (being a bank or licensed EU credit institution) are rated A-1+ by S&P, P-1 by Moody s and F1+ by Fitch, (b) any euro denominated money market fund rated at least AAA by S&P, Aaa by Moody s and AAA by Fitch and (c) any deposit (including, for the avoidance of doubt, any monies on deposit in any of the Issuer Accounts). No Eligible Investments will be acquired which are not qualifying assets for the purposes of Section 110 of the Taxes Consolidation Act, 1997 or which when acquired could give rise to a change to Irish stamp duty for the Issuer on acquisition. Calculation of Amounts and Payments On each Determination Date, the Cash Manager is required to determine, from information provided by the Servicer, the various amounts required to pay interest and principal due on the Notes on the forthcoming Payment Date and all other amounts then payable by the Issuer and the amounts available to make such payments. In addition, the Cash Manager will calculate the Principal Amount Outstanding for the Notes for the Interest Period commencing on such forthcoming Payment Date and the amount of each principal payment (if any) due on each Class of Notes on the next following Payment Date, in each case pursuant to Condition 6.2 (Mandatory Redemption from Available Principal Collections). In addition, the Cash Manager will: (a) make all Liquidity Drawings on behalf of the Issuer; (b) from time to time, pay on behalf of the Issuer all payments and expenses required to be paid by the Issuer to third parties, as determined by the Servicer; and (c) make all payments required to carry out an optional redemption of Notes pursuant to Condition 6.3 (Optional Redemption for Tax or Other Reasons) or Condition 6.4 (Optional Redemption in Full), in each case according to the provisions of the relevant Condition. See further Terms and Conditions of the Notes. Statement to Noteholders The Cash Manager has agreed to deliver to the Issuer, the Issuer Security Trustee, the Servicer, the Special Servicer, the Noteholders and the Rating Agencies, a statement to Noteholders (the Statement to Noteholders) in respect of each Payment Date in which it will notify the recipients of, among other things, all amounts received in the Transaction Account and payments made with respect thereto. Each Statement to Noteholders will be made available to Noteholders and certain other persons on a quarterly basis via the Cash Manager s internet website currently located at invr; however such website does not form part of the information provided for the purposes of this Prospectus. Delegation by the Cash Manager The Cash Manager must not subcontract or delegate the performance of any of its obligations under the Cash Management and Issuer Account Bank Agreement to any subcontractor, agent, representative or delegate without the prior written consent of the Issuer and the Issuer Security Trustee. Any consent to delegate or subcontract will not relieve the Cash Manager from any liability under the Cash Management and Issuer Account Bank Agreement. Fees Pursuant to the Cash Management and Issuer Account Bank Agreement, the Issuer will pay to the Cash Manager on each Payment Date a cash management fee (inclusive of VAT, if any) as agreed 157

158 between the Cash Manager and the Issuer and will reimburse the Cash Manager for all costs and expenses properly incurred by the Cash Manager in the performance of the cash management services. Any successor cash manager will receive remuneration on the same basis. Both before the service of a Note Acceleration Notice and thereafter (subject to certain exceptions), the Issuer will pay the cash management fee to the Cash Manager and the account bank fee (inclusive of VAT, if any) to the Issuer Account Bank and will reimburse the Cash Manager for its costs and expenses, all in priority to payments due on the Notes. This order of priority has been agreed with a view to procuring the continuing performance by each of the Cash Manager and the Issuer Account Bank of its duties in relation to the Notes. Termination of Appointment of the Cash Manager The appointment of Deutsche Bank AG, London Branch as Cash Manager under the Cash Management and Issuer Account Bank Agreement may be terminated by virtue of its resignation or its removal by the Issuer or the Note Trustee. The Issuer (prior to a Note Acceleration Notice being given and not withdrawn and subject to receiving the Note Trustee s consent) or the Note Trustee may terminate the Cash Manager s appointment upon not less than three months written notice or immediately upon the occurrence of a termination event, including, but not limited to, (a) a failure by the Cash Manager to make when due a payment required to be made by the Cash Manager, (b) a failure by the Cash Manager to maintain all appropriate licences, consents, approvals and authorisations required to perform its obligations under the Cash Management and Issuer Account Bank Agreement, (c) a default by the Cash Manager in the performance of any of its other duties under the Cash Management and Issuer Account Bank Agreement which continues unremedied for 10 Business Days, or (d) a petition is presented or an effective resolution passed for the winding up (including, without limitation, the filing of documents with the court or the service of a notice of intention to appoint an administrator) of the Cash Manager or the appointment of an administrator or similar official in respect of the Cash Manager. On the termination of the appointment of the Cash Manager, the Issuer may, subject to certain conditions, appoint a successor cash manager. The Cash Manager may resign as Cash Manager upon not less than three months written notice of resignation to each of the Issuer, the Servicer, the Special Servicer, the Retained Interest Holder, the Issuer Account Bank, the Note Trustee and the Issuer Security Trustee provided that a suitably qualified successor Cash Manager shall have been appointed first. Termination of Appointment of the Issuer Account Bank The Cash Management and Issuer Account Bank Agreement requires that the Issuer Account Bank be, except in certain limited circumstances, a bank which is an Authorised Entity. If Deutsche Bank AG, London Branch ceases to be an Authorised Entity, the Issuer Account Bank will give written notice of such event to the Issuer, the Servicer, the Special Servicer, the Cash Manager and the Issuer Security Trustee and the Cash Manager shall, within a reasonable time after having obtained the prior written consent of the Issuer and the Issuer Security Trustee and subject to establishing substantially similar arrangements to those contained in the Cash Management and Issuer Account Bank Agreement, procure the transfer of the Transaction Account and the Standby Account (if any) and each other account held by the Issuer with the Issuer Account Bank to another bank which is an Authorised Entity. If at the time when a transfer of such account or accounts would otherwise have to be made, there is no other bank which is an Authorised Entity or if no Authorised Entity agrees to such a transfer, the accounts need not be transferred until such time as there is a bank which is an Authorised Entity or an Authorised Entity which so agrees, as the case may be. If, other than in the circumstances specified above, the Cash Manager wishes the bank or branch at which any account of the Issuer is maintained to be changed, the Cash Manager shall obtain the prior written consent of the Issuer and the Issuer Security Trustee, and the transfer of such account shall be subject to the same directions and arrangements as are provided for above. 158

159 GOLDMAN SACHS INTERNATIONAL Goldman Sachs International (GSI) is a leading international investment banking organisation. Its activities and sources of revenue include and are derived from securities underwriting and distribution; trading of corporate debt and equity securities; non-u.s. sovereign debt and mortgage securities; execution of swaps and derivative instruments; mergers and acquisitions; financial advisory services for restructurings; private placements and lease and project financings; real estate brokerage and finance; merchant banking and stock brokerage and research. Services are provided worldwide to a substantial and diversified client base which includes corporations, financial institutions, governments and individual investors. GSI is an English company formed on 2 June 1988 and is successor to a company formed in GSI was re-registered as a private unlimited liability company in England and Wales with the Registrar of Companies on 25 February 1994 (registration number ), having previously been registered as a limited liability company under the name Goldman Sachs International Limited. GSI is regulated by The Financial Services Authority (the FSA), and is an authorised person under the Financial Services and Markets Act 2000 of the United Kingdom (the FSMA), and is subject to their rules. GSI and certain of its affiliates are members of various exchanges and are subject to their rules, including those of the London Stock Exchange plc and the London International Financial Futures and Options Exchange. Certain affiliates of GSI are also subject to regulation by the FSA. Goldman Sachs Holdings (U.K) is an unlimited liability company incorporated under the laws of England and has a 99 per cent. shareholding in GSI. Goldman Sachs Group Holdings (U.K.) is an unlimited liability company incorporated under the laws of England and beneficially owns 100 per cent. of the shares in Goldman Sachs Holdings (U.K.). Goldman Sachs (UK) L.L.C. is a U.S. limited liability company established under the laws of the State of Delaware and has a 100 per cent. shareholding in Goldman Sachs Group Holdings (U.K.). The Goldman Sachs Group, Inc. is a U.S. corporation established under the laws of the State of Delaware and has a 100 per cent, interest in Goldman Sachs (U.K.) L.L.C. The registered office of GSI is Peterborough Court, 133 Fleet Street, London EC4A 2BB, England, telephone number Goldman Sachs Credit Partners L.P. (GSCP) is an exempted limited partnership formed under the laws of Bermuda, having its principal place of business at 85 Broad Street, New York, NY GSCP (DEL) INC., a Delaware corporation, is the general partner and a limited partner of GSCP. GSCP (DEL) LLC is a limited partner of GSCP. GSCP is a member of the Goldman Sachs group of companies. The principal business of GSCP is the origination and syndication of commercial loans as well the secondary trading of such loans. Goldman Sachs Mitsui Marine Derivative Products, L.P. (GSMMDP) is a Delaware limited partnership. GSMMDP was formed as a joint venture of The Goldman Sachs Group, Inc. and Mitsui Sumitomo Insurance Co., Ltd. to act as principal in a broad range of over-the-counter derivative products, including interest rate and currency swaps and related products. GSMMDP is rated AAA by S&P and Aaa by Moody s. The principal place of business of GSMMDP is 85 Broad Street, New York, New York

160 THE ISSUER The Issuer is a special purpose vehicle established for the purpose of issuing asset backed securities and was incorporated in Ireland as a public limited company on 3 August 2006, registered number under name Fleet Street Finance Two P.L.C. under the Companies Acts of Ireland (the Companies Acts). The registered office of the Issuer is 5 Harbourmaster Place, IFSC, Dublin 1, Ireland and the phone number is The authorised share capital of the Issuer is A40,000 divided into 40,000 ordinary shares of par value A1 each (the Shares). The Issuer has issued 40,000 Shares, all of which are fully paid and are held on trust by Deutsche International Finance (Ireland) Limited (the Share Trustee) under the terms of a declaration of trust (the Declaration of Trust) dated 10 October 2006, under which the Share Trustee holds the Shares on trust for charity. The Share Trustee has no beneficial interest in and derives no benefit (other than any fees for acting as Share Trustee) from its holding of the Shares. The Share Trustee will apply any income derived from the Issuer solely for the above purposes. Deutsche International Corporate Services (Ireland) Limited (the Corporate Services Provider), an Irish company, acts as the corporate services provider for the Issuer. The office of the Corporate Services Provider serves as the general business office of the Issuer. Through the office and pursuant to the terms of the corporate services agreement entered into on 10 October 2006 between the Issuer and the Corporate Services Provider (the Corporate Services Agreement), the Corporate Services Provider performs various management functions on behalf of the Issuer, including the provision of certain clerical, reporting, accounting, administrative and other services until termination of the Corporate Services Agreement. In consideration of the foregoing, the Corporate Services Provider receives various fees and other charges payable by the Issuer at rates agreed upon from time to time plus expenses. The terms of the Corporate Services Agreement provide that either party may terminate the Corporate Services Agreement upon the occurrence of certain stated events, including any material breach by the other party of its obligations under the Corporate Services Agreement which is either incapable of remedy or which is not cured within 30 days from the date on which it was notified of such breach. In addition, either party may terminate the Corporate Services Agreement at any time by giving at least 90 days written notice to the other party. The Corporate Services Provider s principal office is 5 Harbourmaster Place, IFSC, Dublin 1, Ireland. Business The principal objects of the Issuer are set forth in clause 3 of its Memorandum of Association and include, inter alia, the power to issue securities and to raise or borrow money, to grant security over its assets for such purposes, to lend with or without security and to enter into derivative transactions. Cash flow derived from the Loan and the Related Security will be the Issuer s only source of funds to fund payments in respect of the Notes. So long as any of the Notes remain outstanding, the Issuer will be subject to the restrictions set out in Condition 4.1 and in the Note Trust Deed. In particular, the Issuer has undertaken not to carry out any business other than the issue of Notes and the entry into of agreements related thereto and does not and will not have any substantial assets other than the Loan and the Related Security and does not and will not have any substantial liabilities other than in connection with the Notes and the Loan and the Related Security. The Issuer has, and will have, no material assets other than the sum of A40,000 representing the proceeds of its issued share capital, such fees (as agreed) payable to it in connection with the issue of Notes and the Collateral. Save in respect of the fees generated in connection with the issue of Notes, any related profits and the proceeds of any deposits and investments made from such fees or from amounts representing the proceeds of the Issuer s issued share capital, the Issuer will not accumulate any surpluses. The Notes are limited recourse secured obligations of the Issuer and not of the shareholder(s) of the Issuer, the Share Trustee, the Note Trustee, the Issuer Security Trustee, the Corporate Services Provider, the Finance Parties (other than the Issuer), the Managers, the Originator, the Retained Interest Holder, the Servicer, the Special Servicer, the Cash Manager, the Borrower Security Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Managers, the Servicer, the 160

161 Special Servicer, the Cash Manager, the Borrower Security Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Basis Swap Counterparty, the Issuer Account Bank, the Issuer Account Bank or any company in the same group of companies as any of them. Furthermore, they are not obligations of, or guaranteed in any way by, the Arranger, the Lead Manager and the Co-Manager. Save as disclosed herein, there has been no material adverse change in the financial position or prospects of the Issuer since the date of its incorporation. Save for the issues of Notes and their related arrangements, the Issuer has no borrowings or indebtedness in the nature of borrowings (including loan capital issued or created but unissued), term loans, liabilities under acceptances or acceptance credits, mortgages, charges or guarantees or other contingent liabilities. Directors and Company Secretary The Issuer s Articles of Association provide that the Board of Directors of the Issuer will consist of at least two Directors. The Directors of the Issuer and their business addresses are as follows: Michael Whelan, 5 Harbourmaster Place, IFSC, Dublin 1, Ireland. Jennifer Coyne, 5 Harbourmaster Place, IFSC, Dublin 1, Ireland. The Company Secretary is Deutsche International Corporate Services (Ireland) Limited. Financial Statements Since its date of incorporation, the Issuer has not commenced operations and no financial statements of the Issuer have been prepared as at the date of this Prospectus. The Issuer intends to publish its first financial statements in respect of the period ending on 31 July The Issuer will not prepare interim financial statements. The financial year of the Issuer ends on 31 July in each year. The profit and loss account and balance sheet can be obtained free of charge from the registered office of the Issuer. The Issuer must hold its first annual general meeting within 18 months of the date of its incorporation (and no more than 9 months after the financial year end) and thereafter the gap between its annual general meetings must not exceed 15 months. One annual general meeting must be held in each calendar year. The auditors of the Issuer are Deloitte s & Touche of Deloitte & Touche House, Earlsfort Terrace, 2 Dublin, Ireland who are chartered accountants and are members of the Institute of Chartered Accountants and registered auditors qualified to practise in Ireland. 161

162 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS Yield The yield to maturity on any Class of Notes will depend upon the price paid by the Noteholders, the interest rate thereof from time to time, the rate and timing of the distributions in reduction of the Principal Amount Outstanding of such Class of Notes and the rate, timing and severity of losses on the Loan, as well as prevailing interest rates at the time of payment or loss realisation. Noteholders generally will be entitled to receive distributions of principal from principal repayments on the Loan. The Loan provides for scheduled repayments of Amortisation Instalments on each Loan Payment Date following on or after 20 October In addition to these scheduled repayments the Borrower may, and in certain circumstances must, make prepayments of principal on the Loan. Therefore, the rate of distributions of principal in reduction of the Principal Amount Outstanding of any Class of Notes, the aggregate amount of distributions in principal on any Class of Notes and the yield to maturity on any Class of Notes will be directly affected by the rate of unscheduled payments of principal on the Loan, the amount and timing of any default by the Borrower and the severity of losses occurring upon a default. In addition, a prepayment in part or full of any Class of Notes may result from a repurchase by the Originator of the Loan due to breaches of certain representations and warranties in the Loan Sale Agreement as described herein under The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Deed. A prepayment in full of the Notes may also result from or upon a purchase of the Loan by the Servicer or Special Servicer in accordance with the terms of the Servicing Agreement. A loss with respect to the Loan may occur in connection with a default on the Loan and/or the liquidation of all or part of any of the related Properties. Noteholders will only receive distributions of principal or interest when due to the extent that the related payments under the Loan are actually received or sufficient Interest Drawings are available under the Liquidity Facility Agreement. Consequently, any defaulted payment for which no such drawings in respect thereof can be made under the Liquidity Facility Agreement will, to the extent of the principal portion thereof, tend to extend the weighted average lives of the Notes. The rate of prepayments (including voluntary and involuntary prepayments) on mortgage loans is influenced by a variety of economic, geographic, social and other factors, including the level of mortgage interest rates, the amount of prior refinancing effected by the relevant borrower and the rate at which borrowers default on their mortgage loans. The terms of the Loan and, in particular, the extent to which the Borrower is entitled to prepay the Loan, the ability of the Borrower to realise income from the related Properties in excess of that required to meet scheduled payments of interest on the Loan, the obligation of the Borrower to ensure that certain debt service coverage tests are met as a condition to the disposal of the relevant Property, the risk of compulsory purchase of the Property and the risk that payments by the Borrower may become subject to tax or result in an increased cost for the Issuer as well as the extent to which prepayment charges are due with respect to any prepayment of principal may affect the rate of principal payments on the Loan and, consequently, the yield to maturity of the classes of Notes. The timing of changes in the rate of prepayment on the Loan may significantly affect the actual yield to maturity experienced by an investor even if the average rate of principal payments experienced over time is consistent with such investor s expectation. In general, the earlier a prepayment of principal on the Loan, the greater the effect on such investor s yield to maturity. As a result, the effect on such investor s yield of principal payments occurring at a rate higher (or lower) than the rate anticipated by the investor during the period immediately following the issuance of the Notes would not be fully offset by a subsequent like reduction (or increase) in the rate of principal payments. The Issuer is not aware of any publicly available statistics that set forth principal prepayment experience or prepayment forecasts of commercial mortgage loans over an extended period of time, either fixed-rate loans or floating rate mortgage loans. No assurances can be given as to the rate of prepayments on the Loan in stable or changing interest rate environments. 162

163 No representation is made as to the rate of principal prepayments on the Loan or as to the yield to maturity of the Notes. An investor is urged to make an investment decision with respect to any Class of Notes based on the anticipated yield to maturity of such Class of Notes resulting from its purchase price and such investor s own determination as to anticipated Loan prepayment rates under a variety of scenarios. The extent to which any Class of Notes is purchased at a discount or a premium and the degree to which the timing of payments on the Notes is sensitive to prepayments will determine the extent to which the yield to maturity of such Class of Notes may vary from the anticipated yield. An investor should carefully consider the associated risks, including, in the case of any Notes purchased at a discount, the risk that a slower than anticipated rate of principal payments on the Loan could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any Notes purchased at a premium, the risk that a faster than anticipated rate of principal payments could result in an actual yield to such investor that is lower than the anticipated yield. An investor should consider the risk that rapid rates of prepayments on the Loan, and therefore of amounts distributable in reduction of the principal balance of the Notes may coincide with periods of low prevailing interest rates. During such periods, the effective interest rates on securities in which an investor may choose to reinvest such amounts distributed to it may be lower than the applicable rate of interest on the Notes. Conversely, slower rates of prepayments on the Loan, and therefore, of amounts distributable in reduction of principal balance of the Notes entitled to distributions of principal, may coincide with periods of high prevailing interest rates. During such periods, the amount of principal distributions resulting from prepayments available to an investor in Notes for reinvestment at such high prevailing interest rates may be relatively small. Final Maturity Date The Final Maturity Date for each Class of Notes is the Payment Date occurring in 2014, which is the Payment Date that is three years after the latest maturity date of the Loan. Because the Loan may be prepaid prior to maturity, it is possible that the Principal Amount Outstanding of each Class of Notes will be reduced to zero significantly earlier than the Final Maturity Date. However, delinquencies on the Loan could result in final distributions in reduction of the Principal Amount Outstanding of one or more Classes after the Final Maturity Date. Weighted Average Life of the Notes The weighted average life of a Note refers to the average amount of time that will elapse from the date of its issuance until each euro allocable to principal of such Note is distributed to the investor. For purposes of this Prospectus, the weighted average life of a Note is determined by (a) multiplying the amount of each principal distribution thereon by the number of years from the Issue Date to the related Payment Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Principal Amount Outstanding of such Note. Accordingly, the weighted average life of any such Note will be influenced by, among other things, the rate at which principal of the Loan is prepaid or otherwise collected or advanced and the extent to which such payments, collections or advances of principal are in turn applied in reduction of the Principal Amount Outstanding of the Class of Notes to which such Note belongs. The average lives of the Notes were calculated on the basis of actual calendar days and actual calendar years. Based on the Modelling Assumptions, the following tables indicate that resulting weighted average lives of the Notes and set forth the percentage of the initial Principal Amount Outstanding of each such Class of Notes that would be outstanding after the Issue Date and on each Payment Date, after repayment or prepayment, as applicable, of principal paid in that period, occurring in January, April, July and October of each year until For purposes of preparing the tables, it was assumed that: (a) the initial Principal Amount Outstanding of, and the interest rates for, each Class of Notes are as set forth herein; (b) the scheduled quarterly payments for the Loan are based on stated quarterly principal (assuming funds are available therefor) and interest payments; 163

164 (c) all scheduled quarterly payments are assumed to be received on a timely basis on the applicable Loan Payment Date (including payments due on the Loan Final Maturity Date); (d) there are no delinquencies or losses in respect of the Loan, there are no extensions of maturity in respect of the Loan (except as otherwise assumed in the Scenarios) and there are no casualties or compulsory purchases affecting the Properties; (e) no prepayments are made on the Loan (except as otherwise assumed in the Scenarios); (f) none of the Issuer, the Servicer or the Special Servicer, as applicable, exercises the rights of optional termination described herein and in Conditions 6.3 (Optional Redemption for Tax or Other Reasons) and 6.4 (Optional Redemption in Full) except as set out in Scenario 2 below; (g) the Originator is not required to repurchase the Loan and no indemnity payment is required to be made by the Originator to the Issuer; (h) there are no additional unanticipated administrative expenses; (i) principal and interest payments on the Notes are made on each Payment Date in accordance with the Conditions, commencing in January 2007; (j) the prepayment provisions for the Loan are as set forth in this Prospectus, assuming the term for the prepayment provisions begins on the Cut-Off Date; (k) the Basis Swap Agreement remains in place and the Basis Swap Counterparty makes timely payment of all amounts due under the Basis Swap Agreement, respectively; (l) the Issue Date is 24 October 2006; and (m) no Note Acceleration Notice has been served. Assumptions (a) through (m) above are collectively referred to as the Modelling Assumptions. In the case of scenario 1 below ( Scenario 1 ), it is assumed that the Loan is paid in full on its maturity date, and the Loan amortises down according to the scheduled amortisation, the Borrower s business plan is met and the Issuer does not exercise its call option when the outstanding debt amount falls below 10% of the original debt amount. In the case of scenario 2 below ( Scenario 2 ), it is assumed that the Loan is paid in full on its maturity date, and the Loan amortises down according to the scheduled amortisation, the Borrower s business plan is met and the Issuer exercises its call option at the end of the quarter when the outstanding debt amount falls below 10% of the original debt amount. In the case of scenario 3 below ( Scenario 3 ), it is assumed that the Loan is paid in full on its maturity date, and the Loan amortises down according to the scheduled amortisation, the Borrower s business plan is met with 6 months delay and the Issuer does not exercise its call option at the end of the quarter when the outstanding debt amount falls below 10% of the original debt amount. In the case of scenario 4 below ( Scenario 4 ), it is assumed that the Loan is paid in full on its maturity date, and the Loan amortises down according to the scheduled amortisation, the Borrower s business plan is met with one year delay and the Issuer does not exercise its call option at the end of the quarter when the outstanding debt amount falls below 10% of the original debt amount. In the case of scenario 5 below ( Scenario 5 ), it is assumed that the Loan is paid in full on its maturity date, and the Loan amortises down according to the scheduled amortisation, no assets are sold during the life of the loan and the Issuer does not exercise its call option when the outstanding debt amount falls below 10% of the original debt amount. Scenarios 1, 2, 3, 4 and 5 are collectively referred to herein as the Scenarios. 164

165 Percentage of the Initial Principal Amount Outstanding for each Designated Scenario Class A (Principal Outstanding End of Period) Payment Date Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Closing 100.0% 100.0% 100.0% 100.0% 100.0% 26-Jan % 99.6% 99.6% 99.6% 99.6% 26-Apr % 99.2% 99.2% 99.2% 99.2% 26-Jul % 98.9% 98.9% 98.9% 98.9% 26-Oct % 98.5% 98.5% 98.5% 98.5% 26-Jan % 92.1% 98.1% 98.1% 98.1% 26-Apr % 91.7% 97.7% 97.7% 97.7% 26-Jul % 77.2% 91.3% 97.3% 97.3% 26-Oct % 76.9% 91.0% 96.9% 96.9% 26-Jan % 76.6% 76.5% 90.6% 96.6% 26-Apr % 76.3% 76.2% 90.2% 96.2% 26-Jul % 35.1% 75.9% 75.8% 95.8% 26-Oct % 34.9% 75.6% 75.5% 95.4% 26-Jan % 34.7% 34.4% 75.2% 95.0% 26-Apr % 34.6% 34.3% 74.9% 94.7% 26-Jul % 0.0% 34.1% 33.8% 94.3% 26-Oct % 0.0% 34.0% 33.7% 93.9% 26-Jan % 0.0% 0.9% 33.5% 93.5% 26-Apr % 0.0% 0.9% 33.3% 93.1% 26-Jul % 0.0% 0.0% 0.0% 0.0% WAL Class B (Principal Outstanding End of Period) Payment Date Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Closing 100.0% 100.0% 100.0% 100.0% 100.0% 26-Jan % 100.0% 100.0% 100.0% 100.0% 26-Apr % 100.0% 100.0% 100.0% 100.0% 26-Jul % 100.0% 100.0% 100.0% 100.0% 26-Oct % 100.0% 100.0% 100.0% 100.0% 26-Jan % 95.0% 100.0% 100.0% 100.0% 26-Apr % 95.0% 100.0% 100.0% 100.0% 26-Jul % 82.8% 94.9% 100.0% 100.0% 26-Oct % 82.8% 94.9% 100.0% 100.0% 26-Jan % 82.8% 82.7% 94.9% 100.0% 26-Apr % 82.8% 82.7% 94.9% 100.0% 26-Jul % 47.2% 82.7% 82.6% 100.0% 26-Oct % 47.2% 82.7% 82.6% 100.0% 26-Jan % 47.2% 46.9% 82.6% 100.0% 26-Apr % 47.2% 46.9% 82.6% 100.0% 26-Jul % 0.0% 46.9% 46.6% 100.0% 26-Oct % 0.0% 46.9% 46.6% 100.0% 26-Jan % 0.0% 11.4% 46.6% 100.0% 26-Apr % 0.0% 11.4% 46.6% 100.0% 26-Jul % 0.0% 0.0% 0.0% 0.0% WAL (years)

166 Class C (Principal Outstanding End of Period) Payment Date Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Closing 100.0% 100.0% 100.0% 100.0% 100.0% 26-Jan % 100.0% 100.0% 100.0% 100.0% 26-Apr % 100.0% 100.0% 100.0% 100.0% 26-Jul % 100.0% 100.0% 100.0% 100.0% 26-Oct % 100.0% 100.0% 100.0% 100.0% 26-Jan % 95.0% 100.0% 100.0% 100.0% 26-Apr % 95.0% 100.0% 100.0% 100.0% 26-Jul % 82.8% 94.9% 100.0% 100.0% 26-Oct % 82.8% 94.9% 100.0% 100.0% 26-Jan % 82.8% 82.7% 94.9% 100.0% 26-Apr % 82.8% 82.7% 94.9% 100.0% 26-Jul % 47.2% 82.7% 82.6% 100.0% 26-Oct % 47.2% 82.7% 82.6% 100.0% 26-Jan % 47.2% 46.9% 82.6% 100.0% 26-Apr % 47.2% 46.9% 82.6% 100.0% 26-Jul % 0.0% 46.9% 46.6% 100.0% 26-Oct % 0.0% 46.9% 46.6% 100.0% 26-Jan % 0.0% 11.4% 46.6% 100.0% 26-Apr % 0.0% 11.4% 46.6% 100.0% 26-Jul % 0.0% 0.0% 0.0% 0.0% WAL (years) Class D (Principal Outstanding End of Period) Payment Date Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Closing 100.0% 100.0% 100.0% 100.0% 100.0% 26-Jan % 100.0% 100.0% 100.0% 100.0% 26-Apr % 100.0% 100.0% 100.0% 100.0% 26-Jul % 100.0% 100.0% 100.0% 100.0% 26-Oct % 100.0% 100.0% 100.0% 100.0% 26-Jan % 95.0% 100.0% 100.0% 100.0% 26-Apr % 95.0% 100.0% 100.0% 100.0% 26-Jul % 82.8% 94.9% 100.0% 100.0% 26-Oct % 82.8% 94.9% 100.0% 100.0% 26-Jan % 82.8% 82.7% 94.9% 100.0% 26-Apr % 82.8% 82.7% 94.9% 100.0% 26-Jul % 47.2% 82.7% 82.6% 100.0% 26-Oct % 47.2% 82.7% 82.6% 100.0% 26-Jan % 47.2% 46.9% 82.6% 100.0% 26-Apr % 47.2% 46.9% 82.6% 100.0% 26-Jul % 0.0% 46.9% 46.6% 100.0% 26-Oct % 0.0% 46.9% 46.6% 100.0% 26-Jan % 0.0% 11.4% 46.6% 100.0% 26-Apr % 0.0% 11.4% 46.6% 100.0% 26-Jul % 0.0% 0.0% 0.0% 0.0% WAL (years)

167 SUMMARY OF THE PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM Each class of Notes will initially be in the form of a Temporary Global Note without interest coupons or principal receipts attached. Each of the Temporary Global Notes will be delivered on or prior to the Issue Date to the Common Safekeeper for Euroclear and Clearstream, Luxembourg. Interests in each Temporary Global Note will be exchangeable in whole or in part for interests in a Permanent Global Note representing Notes of the same class on a date not earlier than 40 days after the Issue Date (the Exchange Date) provided Certification of the relevant Noteholders has been received. No payments of principal, interest or any other amounts payable in respect of the Notes will be made under the Temporary Global Notes unless exchange for interests in the relevant Permanent Global Note is, upon due Certification, improperly withheld or refused. Each Permanent Global Note will only be exchanged (free of charge, in whole, but not in part) for Definitive Notes with a minimum original principal amount of A50,000 (or an integral multiple of A1,000 in excess thereof in the case of the Class A Notes, the Class B Notes and the Class C Notes, or an integral multiple of A1 in excess thereof in the case of the Class D Notes) with interest coupons, principal coupons and talons for further coupons attached if after the Exchange Date any of the following circumstances apply: (a) if both Euroclear and Clearstream, Luxembourg are closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announce that they are permanently to cease business or do in fact do so and no alternative clearing system satisfactory to the Note Trustee is available; or (b) as a result of any amendment to, or change in, the laws or regulations of the United Kingdom and/or Ireland or any other jurisdiction (or of any political subdivision thereof) or of any authority therein or thereof having power to tax or in the interpretation or administration by a revenue authority or a court of such laws or regulations which becomes effective on or after the Issue Date, the Issuer or any Paying Agent or any other person is or will be required to make any withholding or deduction from any payment in respect of the Notes for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature or the Issuer suffers or will suffer any other disadvantage as a result of such change, which withholding or deduction would not be required or other disadvantage would not be suffered (as the case may be) if the Notes were in definitive form and certificate to such effect signed by two Directors of the Issuer is given to the Note Trustee. Some provisions of the Conditions have a modified application to Global Notes. The following is a summary of certain of those provisions. Payments Payments of principal and interest in respect of any Global Note held by the Common Safekeeper will be made to or to the order of the Common Safekeeper thereof against presentation (and, in the case of final redemption of a Global Note or in circumstances where the unpaid Principal Amount of the related Global Note would be reduced to zero (including as a result of any other payment of principal due in respect of such Global Note), only upon surrender of such Global Note) at the specified office of any Paying Agent outside the United States). A record of each payment so made, distinguishing, in the case of Global Note, between payments of principal and payments of interest and, in the case of partial payments, of the amount of each partial payment shall be entered pro rata in the records of Euroclear and Clearstream, Luxembourg and, upon any such entry being made, the nominal amount of the Notes recorded in the records of Euroclear and Clearstream, Luxembourg and represented by a Global Note shall be reduced by the aggregate principal amount of the Notes redeemed. Payments to holders of interests in such Notes shown in records of Euroclear or Clearstream, Luxembourg as being entitled to receive payments in respect of the Global Notes (such holders being the Euroclear/Clearstream Holders) will be paid in euro. A Euroclear/Clearstream Holder shall receive payments in respect of its interest in any Global Notes in accordance with Euroclear s or, as the case may be, Clearstream, Luxembourg s rules and 167

168 procedures. None of the persons shown from time to time in the records of Euroclear or Clearstream, Luxembourg as the holder of a Note of the relevant Class shall have any claim directly against the Issuer or the Note Trustee in respect of payments due on such Note whilst such Note is represented by a Global Note and the Issuer or the Note Trustee, as the case may be, shall be discharged by payment of the relevant amount to the bearer of the relevant Global Note. Notice to Noteholders For so long as the Notes of any class are represented by Global Notes held by the Common Safekeeper, notices to the holders of such Notes will be validly given if published in a leading newspaper with circulation in Dublin as described in Condition 15(a). Alternatively, at the option of the Issuer and for so long as the Notes are listed on the Irish Stock Exchange and the rules of the Irish Stock Exchange so allow, notices will be validly given to the holders of any class of Notes represented by Global Notes if delivered to Euroclear and/or Clearstream, Luxembourg for communication by them to their participants and for communication by such participants to entitled accountholders and, for so long as the rules of the Irish Stock Exchange so require, with a copy to the Company Announcements Office of the Irish Stock Exchange. Any notice delivered to Euroclear and/or Clearstream, Luxembourg as aforesaid shall be deemed to have been given on the day on which it is delivered to Euroclear or Clearstream, Luxembourg. Form and Title Title to the Global Notes will pass by delivery. The Issuer, the Paying Agents and the Note Trustee may, to the fullest extent permitted by applicable laws, deem and treat the holder of any Global Note as the absolute owner for all purposes (whether or not such Global Note shall be overdue and notwithstanding any notice of ownership, theft or loss, of any trust or other interest therein or of any writing on such Global Note) and the Issuer, the Note Trustee and the Paying Agents shall not be required to obtain any proof thereof or as to the identity of the holder but in all cases without prejudice to the provisions set out in the next succeeding paragraph. Notes represented by a Global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as appropriate. For so long as the Notes are represented by a Global Note, the Issuer, the Note Trustee and all other parties may (to the fullest extent permitted by applicable laws) deem and treat each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of Notes (an Accountholder) as the holder of such principal amount of Notes, in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes or interest in such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error (including for the purposes of any quorum or voting requirements of, or the right to demand a poll at, meetings of the Noteholders), other than for the purposes of payment of principal, interest or any other payment on such Global Notes, the right to which shall be vested, as against the Issuer, the Paying Agents and the Note Trustee, solely in the bearer of the relevant Global Note in accordance with and subject to the terms of the Note Trust Deed. The expressions Noteholders and holder of Notes and related expressions shall be construed accordingly. 168

169 TERMS AND CONDITIONS OF THE NOTES The following are the terms and conditions of the Notes in the form (subject to completion and amendment) in which they will be set out in the Note Trust Deed. The A780,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class A Notes), the A170,000,000 Class B Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class B Notes), the A143,100,000 Class C Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class C Notes) and the A98,921,267 Class D Commercial Mortgage Backed Floating Rate Notes due 2014 (the Class D Notes and together with the Class A Notes, the Class B Notes and the Class C Notes, the Notes) of Fleet Street Finance Two P.L.C. (the Issuer) are constituted by a trust deed to be dated on or about 24 October 2006 (the Issue Date) (the Note Trust Deed, which expression includes such trust deed as from time to time modified in accordance with the provisions therein contained and any deed or other document expressed to be supplemental thereto as from time to time so modified) and made between the Issuer and Deutsche Trustee Company Limited as trustee for the holders for the time being of the Notes (in such capacity, the Note Trustee, which expression includes its successors or any further or other trustee under the Note Trust Deed). The respective holders of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes (each a Noteholder and collectively the Noteholders) are referred to in these Conditions (as defined below) as the Class A Noteholders, the Class B Noteholders, the Class C Noteholders and the Class D Noteholders, respectively. Any reference to a class or Class of Notes or Noteholders shall be a reference to any, or all of, the respective Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes or any, or all of, their respective holders, as the case may be. The security for the Notes is constituted by, and on terms set out in, a deed of charge and assignment dated on or about the Issue Date (the Issuer Deed of Charge and Assignment, which expression includes such deed of charge and assignment as from time to time modified in accordance with the provisions therein contained and any deed or other document expressed to be supplemental thereto as from time to time so modified) between, among others, the Issuer and Deutsche Trustee Company Limited as security trustee for the Issuer Secured Creditors (the Issuer Security Trustee, which expression includes its successors or any further or other trustee under the Issuer Deed of Charge and Assignment) and a German Security Assignment Agreement dated on or about the Issue Date (the German Security Assignment Agreement), which expression includes such German Security Assignment Agreement as from time to time modified in accordance with the provisions therein contained and any deed or other document expressed to be supplemental thereto as from time to time so modified) between, among others, the Issuer and Deutsche Trustee Company Limited as Issuer Security Trustee. By an agency agreement dated on or about the Issue Date (the Agency Agreement, which expression includes such agency agreement as from time to time modified in accordance with the provisions therein contained and any agreement, deed or other document expressed to be supplemental thereto as from time to time so modified) and made between, among others, the Issuer, the Note Trustee, Deutsche Bank AG, London Branch in its separate capacities under the same agreement as principal paying agent (the Principal Paying Agent, which expression includes any other principal paying agent appointed in respect of the Notes) and agent bank (the Agent Bank, which expression includes any other agent bank appointed in respect of the Notes) (the Principal Paying Agent being, together with the Irish Paying Agent (as defined below) and any further or other paying agents for the time being appointed in respect of the Notes, the Paying Agents and, together with the Agent Bank, the Agents) and Deutsche International Corporate Services (Ireland) Limited in its capacity under the same agreement as Irish paying agent (the Irish Paying Agent, which expression includes any other Irish paying agent appointed in respect of the Notes) pursuant to which provision is made for, among other things, the payment of principal and interest in respect of the Notes. The provisions of these terms and conditions (the Conditions and any reference to a Condition shall be construed accordingly) include summaries of, and are subject to, the detailed provisions of the Note Trust Deed, the Issuer Deed of Charge and Assignment, the German Security Assignment Agreement and the Agency Agreement, and of the Cash Management and Issuer Account Bank Agreement, the Basis Swap Agreement, the Liquidity Facility Agreement, the Corporate Services Agreement, the 169

170 Servicing Agreement and the Loan Sale Agreement (each as defined in the Master Definitions and Construction Schedule (as defined below)). Copies of the Note Trust Deed, the Agency Agreement, the Issuer Deed of Charge and Assignment, the Cash Management and Issuer Account Bank Agreement, the Basis Swap Agreement, the Liquidity Facility Agreement, the Corporate Services Agreement, the Servicing Agreement, the Loan Sale Agreement and the Master Definitions and Construction Schedule are available for inspection by the Noteholders at the principal office for the time being of the Note Trustee, being at the Issue Date at Winchester House, 1 Great Winchester Street, London EC2N 2DB and at the specified office of each of the Paying Agents. The Noteholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of and definitions contained in the Note Trust Deed, the Agency Agreement, the Issuer Deed of Charge and Assignment, the Cash Management and Issuer Account Bank Agreement, the Basis Swap Agreement, the Liquidity Facility Agreement, the Corporate Services Agreement, the Servicing Agreement, the Loan Sale Agreement, the German Security Assignment Agreement and a master definitions and construction schedule dated the Issue Date and signed for identification purposes only by Allen & Overy LLP (the Master Definitions and Construction Schedule, which expression includes such master definitions and construction schedule as from time to time modified in accordance with the provisions therein contained and any agreement, deed or other document expressed to be supplemental thereto as from time to time so modified). The issue of the Notes was authorised by resolution of the board of directors of the Issuer passed on 17 October Capitalised terms used and not otherwise defined in these Conditions shall bear the meanings given to them in the Master Definitions and Construction Schedule. References herein to: (a) (b) Notes shall mean (i) in relation to any Notes represented by a Global Note (as defined below), units of A50,000 (or an integral multiple of A1,000 in excess thereof in the case of the Class A Notes, the Class B Notes and the Class C Notes, or an integral multiple of A1 in excess thereof in the case of the Class D Notes) (less any Principal Payments since the Issue Date), (ii) any Global Note and (iii) any Definitive Notes; Extraordinary Resolution in respect of a Class of Notes means: (i) (ii) a resolution passed at a meeting of such Class or Classes duly convened and held in accordance with the Note Trust Deed by a majority consisting of not less than threefourths of the persons voting thereat upon a show of hands or, if a poll is duly demanded, by a majority consisting of not less than three-fourths of the votes cast on such poll; or a resolution in writing signed by or on behalf of the holders of not less than three-fourths in aggregate Principal Amount Outstanding of the Notes of such Class which resolution may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the such holders; and (c) Ordinary Resolution in respect of a Class of Notes means: (i) (ii) a resolution passed at a meeting of such Class or Classes duly convened and held in accordance with the Note Trust Deed by a simple majority of the persons voting thereat on a show of hands or, if a poll is duly demanded, by a simple majority of the votes cast on such poll; or a resolution in writing signed by or on behalf of the holders of not less than a simple majority in aggregate Principal Amount Outstanding of the Notes of such Class, which resolution may be contained in one document or in several documents in like form each signed by or on behalf of one or more of such holders. 170

171 1. GLOBAL NOTES 1.1 Temporary Global Notes Each Class of Notes will be in bearer form and will be initially issued in the form of a temporary global note without interest coupons or principal receipts attached (each a Temporary Global Note). Each of the Temporary Global Notes will be delivered on or prior to the Issue Date to a common safekeeper (the Common Safekeeper) for Euroclear and Clearstream, Luxembourg. Upon delivery of any Temporary Global Notes, Euroclear or Clearstream, Luxembourg, as applicable, will credit the account of each Accountholder (as defined below) with the principal amount of Notes for which it has subscribed or paid. Whilst any Note is represented by a Temporary Global Note, payments of principal, interest and any other amount payable in respect of the Notes due prior to the Exchange Date (as defined below) will be made only to the extent that certification to the effect that the beneficial owners of interests in such Note are not United States persons or persons who have purchased for resale to any United States persons (Certification), as required by U.S. Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg in the form required by them, and Euroclear and/or Clearstream, Luxembourg has given a like certification (based on Certifications it has received) to the Principal Paying Agent. 1.2 Permanent Global Notes Interests in each Temporary Global Note will, in accordance with the terms of the Note Trust Deed and such Temporary Global Note, be exchangeable (free of charge) upon a request as described therein on and after 40 days following the Issue Date (the Exchange Date), provided Certification by the relevant Noteholders has been received, for interests in a permanent global Note of the relevant class (each a Permanent Global Note). Each Permanent Global Note will be delivered on or prior to the Issue Date to the Common Safekeeper. The holder of a Temporary Global Note will not be entitled to collect any payment of interest, principal or other amount due on or after the Exchange Date unless, upon due Certification, exchange of the Temporary Global Note for an interest in a Permanent or for Definitive Notes is improperly withheld or refused. The expression Global Note shall be read and construed to mean a Temporary Global Note or a Permanent Global Note as the context may require. On the exchange of each Temporary Global Note for the relevant Permanent Global Note, such Permanent Global Note will remain with the Common Safekeeper. Payments of principal, interest or any other amount payable on a Permanent Global Note will be made through Euroclear and/or Clearstream, Luxembourg without any requirement for Certification. 1.3 Form and Title Title to the Global Notes will pass by delivery. The Issuer, the Paying Agents and the Note Trustee may, to the fullest extent permitted by applicable laws, deem and treat the holder of any Global Note as the absolute owner for all purposes (whether or not such Global Note shall be overdue and notwithstanding any notice of ownership, theft or loss, of any trust or other interest therein or of any writing on such Global Note) and the Issuer, the Note Trustee and the Paying Agents shall not be required to obtain any proof thereof or as to the identity of the holder but in all cases without prejudice to the provisions set out in the next succeeding paragraph. Notes represented by a Global Note held by the Common Safekeeper will be transferable only in accordance with the rules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as appropriate. For so long as the Notes are represented by a Global Note held by the Common Safekeeper, the Issuer, the Note Trustee and all other parties may (to the fullest extent permitted by applicable laws) deem and treat each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of such Notes (an Accountholder) as the holder of such principal amount of such Notes, in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes or interest in such Notes standing to the account of any person 171

172 shall be conclusive and binding for all purposes save in the case of manifest error (including for the purposes of any quorum or voting requirements of, or the right to demand a poll at, meetings of the Noteholders), other than for the purposes of payment of principal, interest or any other payment on such Global Notes, the right to which shall be vested, as against the Issuer, the Paying Agents and the Note Trustee, solely in the bearer of the relevant Global Note in accordance with and subject to the terms of the Note Trust Deed. The expressions Noteholders and holder of Notes and related expressions shall be construed accordingly. In determining whether a particular person is entitled to a particular principal amount of Notes as aforesaid, the Note Trustee may rely on such evidence and/or information and/or certification as it shall, in its absolute discretion, think fit and, if it does so rely, such evidence and/or information and/or certification shall, in the absence of manifest error, be conclusive and binding on all concerned. 2. DEFINITIVE NOTES 2.1 Issue of Definitive Notes A Global Note will be exchanged (free of charge, in whole but not in part) for Notes in definitive form of the related Class in bearer form (Definitive Notes) only if at any time after the Exchange Date any of the following circumstances apply: (a) if both Euroclear and Clearstream, Luxembourg are closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announce that they are permanently to cease business or do in fact do so and no alternative clearing system satisfactory to the Note Trustee is available; or (b) as a result of any amendment to, or change in, the laws or regulations of Ireland or any other jurisdiction (or of any political subdivision thereof) or of any authority therein or thereof having power to tax or in the interpretation or administration by a revenue authority or a court of such laws or regulations which becomes effective on or after the Issue Date, the Issuer or any Paying Agent or any other person is or will be required to make any withholding or deduction from any payment in respect of the Notes for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature or the Issuer suffers or will suffer any other disadvantage as a result of such change, which withholding or deduction would not be required or other disadvantage would not be suffered (as the case may be) if the Notes were in definitive form and a certificate to such effect signed by two Directors of the Issuer is given to the Note Trustee. If any such event referred to above occurs while any of the Notes are represented by a Temporary Global Note, then Definitive Notes will not be issued until the corresponding interest in the relevant Temporary Global Note has been exchanged for the relevant Permanent Global Note, which exchange shall not, in any event, occur before the Exchange Date. Definitive Notes, if issued, will be available at the offices of any Paying Agent. If the Issuer fails to meet obligations to issue Notes in definitive form in exchange for a Permanent Global Note, then that Permanent Global Note shall remain in full force and effect. 2.2 Title to and Transfer of Definitive Notes Each Definitive Note will be issued in bearer form, have a minimum original principal amount of A50,000 and will be serially numbered, with interest coupons (Interest Coupons) and principal coupons (Principal Coupons) (severally or together Coupons) and talons for further Coupons (Talons) attached on issue. Title to a Definitive Note will pass upon delivery. The Issuer, the Paying Agents and the Note Trustee may, to the fullest extent permitted by applicable laws, deem and treat the holder of any Definitive Note and the holder of any Coupons as the absolute owner for all purposes (whether or not the Definitive Notes or Coupons shall be overdue and notwithstanding any notice of ownership, theft or loss, of any trust or other interest therein or of any writing on the Definitive Note or Coupon) and the Issuer, the Note Trustee and the Paying Agents shall not be required to obtain any proof thereof or as to the identity of the holder. 172

173 3. STATUS, SECURITY AND PRIORITY 3.1 Status and relationship among the Notes (a) The Notes constitute direct, secured and limited recourse obligations of the Issuer and are secured by the Issuer Security and the Issuer German Security (as more particularly described in Condition 3.2 below). The Notes of each class rank pari passu and without preference or priority among the Notes of the same class. (b) (c) Following the service of a Note Acceleration Notice (as defined in Condition 10.1) or the Issuer Security or Issuer German Security otherwise becoming enforceable, the Class A Notes will rank in priority to the Class B Notes, the Class C Notes and the Class D Notes; the Class B Notes will rank in priority to the Class C Notes and the Class D Notes; and the Class C Notes will rank in priority to the Class D Notes. Save as described in Condition 6, prior to the service of a Note Acceleration Notice or the Issuer Security or Issuer German Security otherwise being enforceable certain payments will be subordinated as follows: repayments of principal and payments of interest on the Class D Notes will be subordinated to repayments of principal and payments of interest on the Class A Notes, the Class B Notes and the Class C Notes; repayments of principal and payments of interest on the Class C Notes will be subordinated to repayments of principal and payments of interest on the Class A Notes and the Class B Notes; and repayments of principal and payments of interest on the Class B Notes will be subordinated to repayments of principal and payments of interest on the Class A Notes. The Note Trust Deed and the Issuer Deed of Charge and Assignment contain provisions requiring the Note Trustee or, as the case may be, the Issuer Security Trustee, to have regard to the interests of the holders of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes equally as regards all powers, trusts, authorities, duties and discretions of the Note Trustee or, as the case may be, the Issuer Security Trustee (except where expressly provided otherwise); provided that (A) if, in the opinion of the Note Trustee or, as the case may be, the Issuer Security Trustee, there is a conflict between the interests of the Class A Noteholders (for so long as there are any Class A Notes outstanding) on the one hand and the interests of the Class B Noteholders and/or the Class C Noteholders and/or the Class D Noteholders on the other hand, the Note Trustee or, as the case may be, the Issuer Security Trustee, shall have regard only to the interests of the Class A Noteholders; (B) if, in the opinion of the Note Trustee, or, as the case may be, the Issuer Security Trustee, there is a conflict between the interests of the Class B Noteholders (for so long as there are any Class B Notes outstanding) on the one hand and the interests of the Class C Noteholders and/or the Class D Noteholders on the other hand, the Note Trustee or, as the case may be, the Issuer Security Trustee, shall (subject to (A) above) have regard only to the interests of the Class B Noteholders; and (C) if, in the opinion of the Note Trustee, or, as the case may be, the Issuer Security Trustee, there is a conflict between the interests of the Class C Noteholders (for so long as there are any Class C Notes outstanding) on the one hand and the interests of the Class D Noteholders on the other hand, the Note Trustee or, as the case may be, the Issuer Security Trustee, shall (subject to (A) and (B) above) have regard only to the interests of the Class C Noteholders; but so that this proviso shall not apply in the case of any powers, trusts, authorities, duties or discretions of the Note Trustee or, as the case may be, the Issuer Security Trustee, in relation to which it is expressly stated that they may be exercised by the Note Trustee, or, as the case may be, the Issuer Security Trustee, only if in its opinion the interests of the Noteholders of each class would not be materially prejudiced thereby. The Note Trustee is not required to have regard to the interests of any other person. Except where expressly provided otherwise, so long as any of the Notes remain outstanding, the Issuer Security Trustee is not required to have regard to the interests of any other persons entitled to the benefit of the Issuer Security and Issuer German Security or, at any time, the interest of any other person. 3.2 Security and Priority of Payments The security interests granted in respect of the Notes are set out in the Issuer Deed of Charge and Assignment and the German Security Assignment Agreement. Pursuant to the Issuer Deed of Charge and Assignment and the German Security Assignment Agreement, the Issuer will 173

174 grant the Issuer Security and the Issuer German Security respectively in favour of the Issuer Security Trustee for itself and as trustee for the Note Trustee, the Noteholders, any receiver appointed pursuant to the terms of the Issuer Deed of Charge and Assignment or the German Security Assignment Agreement and any other Appointee, the Cash Manager, the Corporate Services Provider, the Liquidity Facility Provider, the Agents, the Servicer, the Special Servicer, the Originator, the Retained Interest Holder, the Basis Swap Counterparty and the Issuer Account Bank (the Issuer Security Trustee and all of such persons being collectively, the Issuer Secured Creditors). Pursuant to the Issuer Deed of Charge and Assignment, the Issuer with full title guarantee has created the following security (the Issuer Security) in favour of the Issuer Security Trustee for itself and on trust for the other Issuer Secured Creditors: (a) a first fixed charge over the Issuer s rights in, to and under the trusts created by the Borrower Security Trust Agreement and any proceeds of enforcement of the Related Security; (b) an assignment by way of first-ranking security of the Issuer s rights under the Loan Intercreditor Agreement, the Retained Interest Holder Intercreditor Deed, the Servicing Agreement, the Note Trust Deed, the Cash Management and Issuer Account Bank Agreement, the Agency Agreement, the Liquidity Facility Agreement, the Basis Swap Agreement, the Corporate Services Agreement, the Master Definitions and Construction Schedule, and all other agreements, contracts, deeds or instruments which it enters into on or after the Issue Date and which are governed by English law; (c) a fixed first charge over the Issuer s interests in the Transaction Account, the Standby Account (subject as set out below) and any other bank account in England in which the Issuer may place and hold its cash resources, and in the funds from time to time standing to the credit of such accounts and in the debts represented thereby (excluding, for the avoidance of doubt, the Issuer Share Capital Account); (d) a first fixed charge in and to such Eligible Investments or other investments made by or on behalf of the Issuer using monies standing to the credit of the Transaction Account or the Standby Account and all monies, income and proceeds payable thereunder or accrued thereon and the benefit of all covenants relating thereto and all rights and remedies enforcing the same; and (e) a first-ranking floating charge governed by English law over the whole of the undertaking and assets of the Issuer, present and future (excluding, for the avoidance of doubt, the Issuer Share Capital Account) (to the extent not effectively assigned or charged as set out in paragraphs (a) through (d) above and other than property or assets subject to the security constituted in the German Security Assignment Agreement). Pursuant to the German Security Assignment Agreement the Issuer has granted in favour of the Issuer Security Trustee as trustee (Treuhänder) for itself and the Issuer Secured Creditors a security assignment of all of the Issuer s rights under the Loan, the Related Security and the Senior Facility Agreement, including all amounts which man become payable to the Issuer thereunder, and the Loan Sale Agreement (the Issuer German Security). The Cash Management and Issuer Account Bank Agreement contains provisions regulating the priority of application of Available Interest Collections and Available Principal Collections, prior to the service of a Note Acceleration Notice or the Issuer Security or Issuer German Security otherwise becoming enforceable, and the Issuer Deed of Charge and Assignment contains provisions regulating the priority of application of the proceeds of enforcement of the Issuer Security or Issuer German Security by the Issuer Security Trustee after the service of a Note Acceleration Notice or the Issuer Security or Issuer German Security becoming otherwise enforceable. If the Issuer Security or Issuer German Security has become enforceable other than by reason of a default in payment of any amount due on any class of the Notes, the Issuer Security Trustee will not be entitled to dispose of the undertaking, property or assets secured under the Issuer Security or Issuer German Security or any part thereof or otherwise realise the Issuer Security 174

175 or Issuer German Security unless (a) a sufficient amount would be realised to allow discharge in full of all amounts owing to the Noteholders and any amounts required under the Issuer Deed of Charge and Assignment to be paid pari passu with, or in priority to, the Notes, or (b) the Issuer Security Trustee has been advised by such professional advisors as are selected by the Issuer Security Trustee, upon whom the Issuer Security Trustee shall be entitled to rely, that the cash flow prospectively receivable by the Issuer will not (or that there is a significant risk that it will not) be sufficient, having regard to any other actual, contingent or prospective liabilities of the Issuer, to discharge in full in due course all amounts owing to the Noteholders and any amounts required under the Issuer Deed of Charge and Assignment to be paid pari passu with, or in priority to, the Notes, or (c) the Issuer Security Trustee considers, in its discretion, that not to effect such disposal or realisation would place the Issuer Security or Issuer German Security in jeopardy, and, in any event, the Issuer Security Trustee has been indemnified and/or secured to its satisfaction. Amounts standing to the credit of the Standby Account will not be available to the Issuer or any of the Issuer Secured Creditors (other than the Liquidity Facility Provider) at any time after service of a Note Acceleration Notice or the Issuer Security and/or the Issuer German Security otherwise becoming enforceable. Such amounts will be applied toward repayment of any Standby Loans under the Liquidity Facility Agreement. 4. COVENANTS 4.1 Restrictions Save with the prior written consent of the Note Trustee or unless otherwise provided in or envisaged by these Conditions or the other Transaction Documents, the Issuer shall, so long as any Note remains outstanding: (a) (b) Negative Pledge not create or permit to subsist any mortgage, sub-mortgage, assignment, charge, subcharge, pledge, lien (unless arising by operation of law), hypothecation, assignment by way of security or any other security interest whatsoever over any of its assets, present or future, (including any uncalled capital); Restrictions on Activities (i) not engage in any activity whatsoever which is not incidental to or necessary in connection with any of the activities which the Senior Finance Documents or the Transaction Documents provide or envisage that the Issuer will engage in; (ii) not have any subsidiaries or any employees or own, rent, lease or be in possession of any buildings or equipment; or (iii) not amend, supplement or otherwise modify its memorandum or articles of association or other constitutive documents; (c) Disposal of Assets not transfer, sell, lend, part with or otherwise dispose of, or deal with, or grant any option or present or future right to acquire any of its assets or undertaking or any interest, estate, right, title or benefit therein other than as expressly contemplated by the Transaction Documents provided that the Issuer shall have the right to sell or agree to the sale of the Loan or the Related Security if: (i) (A) in the case of a sale, realisation or disposal of part only of the Loan and the Related Security, such sale, realisation or disposal is being made only for the purposes of, and in connection with, a redemption of the Notes pursuant to Condition 6; or such sale, realisation or disposal is made for an amount which is not less than the aggregate outstanding principal amount of the Loan; and 175

176 (B) the amount which would be payable to the Issuer from such sale, realisation or disposal would be sufficient, after deducting any costs and expenses incurred by the Issuer or the Issuer Security Trustee in connection with such sale, realisation or disposal, to enable the Issuer to pay or discharge all claims of the Issuer Secured Creditors in full. (d) (e) (f) (g) (h) (i) (j) (k) Dividends or Distributions not pay any dividend or make any other distribution to its shareholders or issue any further shares except the Issuer Profit Amount paid to Issuer s shareholders pursuant to the Cash Management and Issuer Account Bank Agreement; Borrowings not incur or permit to subsist any indebtedness in respect of borrowed money whatsoever, except in respect of the Notes, the Loan Sale Agreement or the Liquidity Facility Agreement or give any guarantee or indemnity in respect of any indebtedness or of any obligation of any person; Merger not consolidate or merge with any other person or convey or transfer all or substantially all of its property or assets to any other person; Variation not permit any of the Transaction Documents to become invalid or ineffective, or the priority of the security interests created thereby to be reduced, amended, terminated, postponed or discharged, or consent to any variation of, or exercise any powers of consent or waiver pursuant to the terms of the Note Trust Deed, these Conditions, the Issuer Deed of Charge and Assignment or any of the other Transaction Documents, or permit any party to any of the Transaction Documents or the Issuer Security or the Issuer German Security or any other person whose obligations form part of the Issuer Security or Issuer German Security to be released from such obligations or dispose of all or any part of the Issuer Security or Issuer German Security; Bank Accounts not have an interest in any bank account other than the Transaction Account, the Standby Account and the Issuer Share Capital Account, unless such account or interest therein is charged or security is otherwise provided to the Issuer Security Trustee on terms acceptable to it; Assets not own assets other than those representing its share capital, the funds arising from the issue of the Notes, the property, rights and assets secured by the Issuer Security or Issuer German Security and associated and ancillary rights and interests thereto, the benefit of the Loan Documents, the benefit of the Transaction Documents and any investments and other rights or interests created or acquired thereunder, as all of the same may vary from time to time; Equitable Interest not permit any person other than the Issuer Security Trustee and the Note Trustee to have any equitable interest in any of its assets or undertakings or any interest, estate, right, title or benefit therein except as otherwise provided for in the Transaction Documents; U.S. Activities not engage in any activities in the United States (directly or through agents) or derive any income from United States sources as determined under United States income tax principles or hold any property if doing so would cause it to be engaged or deemed to be engaged in a trade or business within the United States as determined under United States tax principles; 176

177 (l) (m) (n) (o) (p) (q) (r) Purchase of Notes not purchase any of the Notes; Business Establishment not have any other business establishment or other fixed establishment other than in the Republic of Ireland; Centre of Main Interests conduct its business and affairs such that, at all times, its centre of main interests for the purposes of the EU Insolvency Regulation (EC) No. 1346/2000 of 29 May 2000 and the UNCITRAL Model Law on Cross-Border Insolvency (as implemented in Great Britain on 4 April 2006 by the Cross-Border Insolvency Regulations 2006, SI 2006/1030) shall be and remain in the Republic of Ireland; Taxation not prejudice its status as a qualifying company within the meaning of Section 110 of the Irish Taxes Consolidation Act 1997, as amended, of Ireland or (without the consent of the Note Trustee) make an election pursuant to subsection (6)(b) of that section and the Issuer shall use reasonable endeavours to procure that a note of profits calculated under Irish GAAP as it existed at 31 December 2004 will be included in its audited financial statements; Tax Grouping not become a member of a group of companies for the purposes of Section 8(8) of the Value Added Tax Act 1972 of Ireland (as amended); Place of Residence establish and retain its place of residence and place of effective management for tax purposes only in Ireland; and Separateness Covenants not permit or consent to any of the following occurring: (i) (ii) (iii) (iv) (v) its books and records being maintained with or co mingled with those of any other person or entity; its bank accounts and the debts represented thereby being co mingled with those of any other person or entity; its assets or revenues being co mingled with those of any other person or entity; or its business being conducted other than in its own name, and, in addition, without limiting the above, the Issuer shall or shall procure that, with respect to itself: (A) (B) (C) (D) (E) separate financial statements in relation to its financial affairs are maintained; all corporate formalities with respect to its affairs are observed; separate stationery, invoices and cheques are used; it always holds itself out as a separate entity; and any known misunderstandings regarding its separate identity are corrected as soon as possible. In giving any consent to the foregoing, the Note Trustee may require the Issuer to make such modifications or additions to the provisions of any of the Transaction Documents or may impose such other conditions or requirements as the Note Trustee may deem expedient (in its absolute discretion) in the interests of the Noteholders. 177

178 4.2 Cash Manager, Servicer and Special Servicer So long as any of the Notes remain outstanding, the Issuer will procure that there will at all times be a Cash Manager in respect of the monies from time to time standing to the credit of the Transaction Account and any other account of the Issuer from time to time and a Servicer and a Special Servicer (if applicable) in respect of the Loan and the Related Security. None of the Cash Manager, the Servicer or the Special Servicer will be permitted to terminate its appointment unless a replacement cash manager, servicer or special servicer, as the case may be, acceptable to the Issuer and the Note Trustee has been appointed. The appointment of the Cash Manager, the Servicer or a Special Servicer may be terminated by the Note Trustee if, among other things, the Cash Manager, the Servicer or such Special Servicer, as applicable, defaults in respect to the observance and performance of specified obligations imposed on it under the Cash Management and Issuer Account Bank Agreement or the Servicing Agreement, as applicable, which default is not remedied within specified periods pursuant to the relevant agreement. Any termination of the appointment of the Cash Manager, the Servicer or a Special Servicer shall only be effective upon the appointment of a replacement cash manager, servicer or a special servicer, as the case may be. 5. INTEREST 5.1 Period of Accrual Each Note bears interest on its Principal Amount Outstanding from (and including) the Issue Date. Each Note (or, in the case of the redemption of part only of a Note, that part only of such Note) shall cease to bear interest from its due date for redemption unless, upon due presentation, payment of the relevant amount of principal or any part thereof is improperly withheld or refused or unless default is otherwise made in respect of payment in which event interest will continue to accrue as provided in the Note Trust Deed. Whenever it is necessary to compute an amount of interest for any period (including any Interest Period (as defined below)), such interest shall be calculated on the basis of actual days elapsed and a 360 day year. 5.2 Payment Dates and Interest Periods Interest on the Notes is payable quarterly in arrear on 26 January, 26 April, 26 July and 26 October in each year (or, if such day is not a Business Day, the next following Business Day) (each a Payment Date) in respect of the Interest Period ending immediately prior thereto. The first Payment Date in respect of the Notes will be the Payment Date falling in January 2007 in respect of the period from (and including) the Issue Date to (but excluding) that Payment Date. In these Conditions, Interest Period shall mean the period from (and including) a Payment Date (or, in respect of the payment of the first Interest Amount (as defined in Condition 5.4 below), the Issue Date) to (but excluding) the next following (or first) Payment Date. 5.3 Rate of Interest The rate of interest payable from time to time in respect of each Class of Notes (each a Rate of Interest and together the Rates of Interest) will be determined by the Agent Bank on the basis of the following provisions. The Agent Bank will at, or as soon as practicable after, a.m. (Brussels time) two TARGET Days prior to the first day of the Interest Period for which the rate will apply (each an Interest Determination Date), determine the Rate of Interest applicable to, and calculate the amount of interest payable on each Class of Notes, for the Interest Period commencing on the Payment Date immediately following such Interest Determination Date or, in the case of the first Interest Period, two TARGET Days prior to the Issue Date. The Rate of Interest applicable to the Notes of each Class for any Interest Period will be equal to EURIBOR (as determined in accordance with this Condition 5.3), plus the Relevant Margin. 178

179 For the purposes of determining the Rate of Interest in respect of each Class of Notes, EURIBOR will be determined by the Agent Bank on the basis of the following provisions: (i) on each Interest Determination Date (or, as the case may be, two TARGET Days prior to the Issue Date), the Agent Bank will determine at or about a.m. (Brussels time) on such date the interest rate for three month euro deposits in the Eurozone inter-bank market, which appears on Moneyline/Telerate Screen No. 248 (the Screen Rate) (or, in respect of the first such Interest Period, a linear interpolation of the rate for three month and four month euro deposits) (or (I) such other page as may replace Moneyline/Telerate Screen No. 248 on that service for the purpose of displaying such information or (II) if that service ceases to display such information, such page as displays such information on such equivalent service (or, if more than one, that one which is approved by the Note Trustee) as may replace the Moneyline/Telerate Monitor); or (ii) if the Screen Rate is not then available, the arithmetic mean (rounded to five decimal places, rounded upwards) of the rates notified to the Agent Bank at its request by each of four reference banks duly appointed for such purpose (the Reference Banks) as the rate at which three month deposits in euro are offered for the same period as that Interest Period by those Reference Banks to prime banks in the Eurozone inter-bank market at or about a.m. (Brussels time) on that date (or, in respect of the first Interest Period, the arithmetic mean of a linear interpolation of the rates for three month and four month euro deposits notified by the Reference Banks). If, on any such Interest Determination Date, at least two of the Reference Banks provide such offered quotations to the Agent Bank, the relevant rate shall be determined, as aforesaid, on the basis of the offered quotations of those Reference Banks providing such quotations. If, on any Interest Determination Date, none or only one of the Reference Banks provides the Agent Bank with such offered quotation, the Agent Bank shall forthwith consult with the Note Trustee and the Issuer for the purposes of agreeing two or one additional bank, as applicable, such that there are at least two banks to provide such a quotation or quotations to the Agent Bank (which bank is in the sole opinion of the Note Trustee suitable for such purpose) and the rate for the Interest Period in question shall be determined, as aforesaid, on the basis of the offered quotations of such banks as so agreed. If no such bank or banks is or are so agreed or such bank or banks as so agreed does not or do not provide such a quotation or quotations, then the rate for the relevant Interest Period shall be the arithmetic mean (rounded to five decimal places, being rounded upwards) of the rates quoted by major banks in the Eurozone, selected by the Agent Bank, at approximately a.m. (Brussels time) on the date which is two TARGET Days prior to the Closing Date or the relevant Interest Determination Date, as the case may be, for loans in euro to leading European banks for a period of three months or, in the case of the first Interest Period, for a period the same as the relevant Interest Period. For the purposes of these Conditions: Business Day means a day (other than a Saturday or a Sunday) on which banks are open for business in London, Dublin, Frankfurt and Amsterdam and which is a TARGET Day. Eurozone means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community (signed in Rome on 25 March 1957), as amended by the Treaty on European Union (signed in Maastricht on 7 February 1992) and the Treaty of Amsterdam (signed in Amsterdam on 2 October 1997). Relevant Margin means, with respect to each Class of Notes: Class A Notes 0.21 per cent. per annum Class B Notes 0.32 per cent. per annum Class C Notes 0.51 per cent. per annum Class D Notes 0.95 per cent. per annum TARGET Day means a day on which the Trans-European Automated Real-Time Gross Settlement Express System settles payments in euro. 179

180 5.4 Determination of Rates of Interest and Calculation of Interest Amounts for Notes The Agent Bank shall, on or as soon as practicable after each Interest Determination Date, but in no event later than the first day of the relevant Interest Period, notify the Issuer, the Note Trustee, the Cash Manager and the Paying Agents in writing of (i) the Rates of Interest applicable to the Interest Period immediately following such Interest Determination Date in respect of each class of the Notes and (ii) subject to Condition 5.9, the amount of interest (the Interest Amount) payable in respect of such Interest Period in respect of each class of the Notes and each Note Factor (as defined in Condition 6.6). The Interest Amount in respect of each class of the Notes shall be calculated by applying the relevant Rate of Interest to the Principal Amount Outstanding of the relevant Class of Notes then outstanding and multiplying such sum by the actual number of days in the relevant Interest Period divided by 360 and rounding the resultant figure downward to the nearest cent. 5.5 Publication of Rates of Interest, Interest Amounts and other Notices As soon as practicable after receiving notification thereof, the Issuer will cause the Rate of Interest and the Interest Amount applicable to each class of the Notes for each Interest Period and the Payment Date in respect thereof to be notified in writing to Irish Stock Exchange Limited (the Irish Stock Exchange) (for so long as the relevant classes of Notes are listed on the Irish Stock Exchange) and will cause notice thereof to be given to the Noteholders in accordance with Condition 15. The Interest Amounts, Payment Date and other determinations so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of any extension or shortening of the Interest Period for each Class of Notes. 5.6 Determination and/or Calculation by the Note Trustee If the Agent Bank does not at any time for any reason determine the Rate of Interest and/or calculate the Interest Amount for any Class of Notes and/or make any other necessary calculations in accordance with the foregoing Conditions, the Note Trustee shall (a) determine the Rate of Interest at such rate as it, in its absolute discretion (having such regard as it shall think fit to the procedure described above), shall deem fair and reasonable in all the circumstances, and/or (as the case may be), (b) calculate the Interest Amount for the relevant class of Notes in the manner specified in Condition 5.4 and (c) calculate each Note Factor in the manner described in Condition 6.6, and any such determination and/or calculation shall be deemed to have been made by the Agent Bank and the Note Trustee shall have no liability in respect thereof. 5.7 Notifications to be Final All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of these Conditions, whether by the Reference Banks (or any of them) or the Agent Bank or the Cash Manager or the Note Trustee shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Reference Banks, the Agent Bank, the Note Trustee, the Servicer, the Special Servicer, the Cash Manager, the Paying Agents and all Noteholders and, subject to the provisions of the Transaction Documents, no liability to the Noteholders shall attach to the Issuer, the Reference Banks, the Agent Bank or the Cash Manager or the Note Trustee in connection with the exercise or non-exercise by them or any of them of their powers, duties and discretions hereunder. 5.8 Reference Banks and Agent Bank The Issuer shall ensure that, so long as any of the Notes remains outstanding, there shall, at all times, be four Reference Banks and an Agent Bank. In the event of the principal London office of any such bank being unable or unwilling to continue to act as a Reference Bank, the Agent 180

181 Bank shall appoint such other bank as may have been previously approved in writing by the Note Trustee to act as such in its place. Any purported resignation by the Agent Bank shall not take effect until a successor so approved by the Note Trustee has been appointed. 5.9 Interest Deferral To the extent that funds available to the Issuer to pay interest on any Class of Notes outstanding on a Payment Date, other than the Most Senior Class of Notes, are insufficient to pay the full amount of such interest (an Interest Deferral Event) then the amount that represents the difference (in each case Deferred Interest) between (A) the amount of interest that would have been payable but for that Interest Deferral Event and (B) the funds so available, will not fall due on that Payment Date but the amount of such shortfall will (after making such payments as the Issuer is obligated to make in priority to payments in respect of the relevant Class of Notes) only become due and payable in order of priority on the next Payment Date upon which funds are available to the Issuer, subject to Condition Such Deferred Interest will accrue interest (Additional Interest) at the rate of interest applicable from time to time to the Class B Notes or the Class C Notes or the Class D Notes, as the case may be, and payment of any Additional Interest will also be deferred until the first Payment Date thereafter on which funds are available (subject to and in accordance with these Conditions) to the Issuer to pay such Additional Interest to the extent of such available funds. Payment of any amounts of Deferred Interest and Additional Interest shall not be deferred beyond the Final Maturity Date or beyond any earlier date on which the relevant Class of Notes falls to be redeemed in full in accordance with Condition 6, and, subject to Condition 5.10 any such amount which has not then been paid in respect of the Class B Notes or the Class C Notes or the Class D Notes shall thereupon become due and payable in full Available Funds Cap To the extent that the amount that is available to pay interest due to the Class D Noteholders on any Payment Date is insufficient to pay the full amount of such interest and such insufficiency is attributable to a Prepayment Interest Deficiency, then the amount of interest equal to the Prepayment Interest Deficiency (AFC Deferred Interest) will not fall due on that Payment Date but will only become due and payable on the Final Maturity Date or such earlier date upon which the Class D Notes are repaid in full. Such AFC Deferred Interest will accrue interest (AFC Additional Interest) at the rate of interest applicable from time to time to the Class D Notes and payment of any such AFC Additional interest will also be deferred until, and will become due and payable on, the Final Maturity Date or such earlier date upon which the Class D Notes are repaid in full. Payment of any amounts of AFC Deferred Interest and AFC Additional Interest will not be deferred beyond the Final Maturity Date or beyond any earlier date on which the Class D Notes fall to be redeemed in full. Prepayment Interest Arrears means on any Payment Date on which there is a Prepayment Interest Deficiency, the difference (if any) between (a) the amount of interest the Class D Noteholders would have received on that Payment Date had there existed no such Prepayment Interest Deficiency and (b) the amount of interest actually paid to the Class D Noteholders (less any Deferred Interest deferred pursuant to Condition 5.9). For the purposes of this Condition 5.10, Prepayment Interest Deficiency means, on any Payment Date, any difference between: (a) the amount that is available to pay interest to the Class D Noteholders on such Payment Date where such difference is attributable to a reduction in the outstanding principal balance of the Loan owned by the Issuer as a result of prepayments on the Loan; and (b) the amount that would be required on such Payment Date to pay all interest that has accrued on the Class D Notes as at the relevant Payment Date. 181

182 6. REDEMPTION AND CANCELLATION 6.1 Final Redemption Unless previously redeemed in full and cancelled as provided in this Condition 6, the Issuer shall redeem all of the Notes at their Principal Amount Outstanding together with accrued interest on the Final Maturity Date, being the Payment Date falling in July The Issuer may not redeem Notes in whole or in part prior to the Final Maturity Date except as provided in this Condition but without prejudice to Condition Mandatory Redemption from Available Principal Collections Unless a Note Acceleration Notice has been served or the Notes are previously redeemed in full and cancelled as provided in Condition 6.9, all of the Notes are subject to mandatory early redemption in part on each Payment Date from the Available Principal Collections available on that Payment Date in the manner set forth in Conditions 6.2(a), 6.2(b) or 6.2(c) (as applicable) below. (a) Application of the Pro Rata Redemption Amount On each Payment Date prior to the occurrence of a Sequential Payment Trigger, the Issuer, or the Cash Manager on its behalf, will apply the Pro Rata Redemption Amount in redeeming each Class of Notes pro rata and pari passu according to their respective Principal Amounts Outstanding (calculated for the avoidance of doubt, before the application on such Payment Date of the Sequential Redemption Amount) until each Class A Note, Class B Note, Class C Note and Class D Note has been redeemed in full. (b) Application of the Sequential Redemption Amount On each Payment Date prior to the occurrence of a Sequential Payment Trigger and following application of the Pro-Rata Redemption Amount as set forth immediately above, the Issuer, or the Cash Manager on its behalf, will apply the Sequential Redemption Amount in the following order of priority (the Issuer Sequential Principal Priority of Payments): (i) first, to redeem the Class A Notes, pro rata and pari passu without preference amongst themselves, until the Class A Notes have been redeemed in full; (ii) second, to redeem the Class B Notes, pro rata and pari passu without preference amongst themselves, until the Class B Notes have been redeemed in full; (iii) third, to redeem the Class C Notes, pro rata and pari passu without preference amongst themselves, until the Class C Notes have been redeemed in full; and (iv) fourth, to redeem the Class D Notes, pro rata and pari passu without preference amongst themselves, until the Class D Notes have been redeemed in full. (c) Application of Available Principal Collections following Sequential Payment Trigger On each Payment Date following the occurrence of a Sequential Payment Trigger, the Issuer or the Cash Manager on its behalf, will apply all Available Principal Collections in accordance with the Issuer Sequential Principal Priority of Payments. (d) For the purposes of these Conditions: Available Principal Collections means in respect of any Determination Date, the aggregate of (i) the Pro Rata Redemption Amount and (ii) the Sequential Redemption Amount; Pro Rata Redemption Amount means an amount, as calculated on each Determination Date prior to the occurrence of a Sequential Payment Trigger, equal to: (i) the sum of all collections received by the Issuer in respect of principal repayments or prepayments on the Loan during the Collection Period immediately preceeding such Determination Date, other than the Sequential Redemption Amount; less (ii) any Liquidation Fee due and payable in respect of the Loan and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period, each in accordance with and pursuant to the terms of the Servicing 182

183 Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount); Release Premium Amount means, in respect of any Determination Date, the aggregate amount of principal prepayments received by or on behalf of the Issuer during the Collection Period then ended of all or part of the Loan that represent Release Amount Differential paid by the Borrower in respect of a disposal of all or part of a Property; Scheduled Amortisation Amount means, in respect of any Determination Date, the aggregate amount of principal received by or on behalf of the Issuer during the Collection Period then ended by way of a required amortisation instalment under the Loan (for the avoidance of doubt, this amount does not include any final required repayment instalment of the Loan); Each of the following is a Sequential Payment Trigger: (i) A Loan Event of Default (based on the terms of the Senior Facility Agreement as at the Issue Date and without regard to any subsequent amendments to the Senior Facility Agreement, or waivers granted in respect thereof) has occurred, provided that a Loan Event of Default shall not be deemed to have occurred for the purposes of this definition if: (A) the Loan Event of Default is with respect to payment and such default has been remedied or cured within 5 Business Days of such default; and/or (B) the Loan Event of Default is other than a Loan Event of Default described in (A) above, and the Loan Event of Default is capable of being remedied or cured within 30 days of such default being notified in accordance with the terms of the Senior Facility Agreement; or (ii) there has been a failure to pay interest when due on any Note (other than the Most Senior Class of Notes then outstanding); or (iii) the occurrence of any Payment Date falling in or after July 2011; Sequential Redemption Amount means an amount, as calculated on each Determination Date equal to: (i) the sum of all Scheduled Amortisation Amounts and all Release Premium Amount; less (ii) any Liquidation Fee due and payable in respect of the Loan (to the extent not paid from the Pro Rata Redemption Amount) and any Workout Fee payable in respect of Principal on the Loan due and payable for such Collection Period (to the extent not payable from the Pro Rata Redemption Amount), each in accordance with and pursuant to the terms of the Servicing Agreement (such Liquidation Fee and Workout Fee to be paid to the Special Servicer in accordance with the Servicing Agreement prior to the application of the Pro Rata Redemption Amount and Sequential Redemption Amount). 6.3 Optional Redemption for Tax or Other Reasons If the Issuer at any time satisfies the Note Trustee (who will be so satisfied if it receives a legal opinion to its satisfaction confirming such matters) immediately prior to giving the notice referred to below that either (a) by virtue of a change in the tax law of the Republic of Ireland or Germany or any other jurisdiction (or the application or official interpretation thereof) from that in effect on the Issue Date, on the next Payment Date the Issuer or any Paying Agent on its behalf would (i) be required to deduct or withhold from any payment of principal or interest in respect of any Note, any amount for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by the relevant jurisdiction (or any political sub-division thereof or authority thereof or therein having power to tax) and such requirement cannot be avoided by the Issuer taking reasonable measures available to it or (ii) suffer a withholding or deduction of any amount from 183

184 any payment to it for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature in respect of the Loan, the Basis Swap Transaction or the Liquidity Facility Agreement, or (b) if any amount payable by the Borrower in relation to the Loan is reduced or ceases to be receivable (whether or not actually received) by the Issuer during the Interest Period preceding the next Payment Date, and, in any such case, the Issuer has, prior to giving the notice referred to below, certified to the Note Trustee that it will have the necessary funds on such Payment Date to discharge all of its liabilities in respect of the Notes to be redeemed under this Condition 6.3 and any amounts required under the Cash Management and Issuer Account Bank Agreement, the Note Trust Deed or the Issuer Deed of Charge and Assignment to be paid in priority to, or pari passu with, the Notes to be so redeemed, which certificate shall be conclusive and binding, and PROVIDED THAT on the Payment Date on which such notice expires, no Note Acceleration Notice has been served, then the Issuer may, on any Payment Date on which the relevant event described above is continuing, having given not more than 60 nor less than 30 days written notice ending on such Payment Date to the Note Trustee, the Paying Agents and to the Noteholders in accordance with Condition 15 redeem: (a) (b) (c) all Class A Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class A Notes plus interest accrued and unpaid thereon; and all Class B Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class B Notes plus interest accrued and unpaid thereon; and all Class C Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class C Notes plus interest accrued and unpaid thereon; and (d) all Class D Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class D Notes plus interest accrued and unpaid thereon. 6.4 Optional Redemption in Full Upon giving not more than 60 nor less than 30 days written notice to the Note Trustee, the Servicer, the Paying Agents and the Noteholders in accordance with Condition 15, and provided that on the Payment Date on which such notice expires, no Note Acceleration Notice in relation to the Notes has been served, and further provided that the Issuer has, prior to giving such notice, certified to the Note Trustee that it will have the necessary funds to discharge on such Payment Date all of its liabilities in respect of the Notes to be redeemed under this Condition 6.4 and any amounts required under the Cash Management and Issuer Account Bank Agreement, the Note Trust Deed or the Issuer Deed of Charge and Assignment to be paid on such Payment Date which rank prior to, or pari passu with, the Notes, which certificate shall be conclusive and binding, and further provided that the then aggregate Principal Amount Outstanding of all of the Notes would be less than 10 per cent. of their Principal Amount Outstanding as at the Issue Date the Issuer may redeem on such Payment Date: (a) (b) (c) all Class A Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class A Notes plus interest accrued and unpaid thereon; and all Class B Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class B Notes plus interest accrued and unpaid thereon; and all Class C Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class C Notes plus interest accrued and unpaid thereon; and (d) all Class D Notes in an amount equal to the then aggregate Principal Amount Outstanding of the Class D Notes plus interest accrued and unpaid thereon. 6.5 Purchases The Issuer may not purchase any of the Notes. 184

185 6.6 Principal Amount Outstanding and Note Factor On each Determination Date, the Cash Manager shall determine (i) the Principal Amount Outstanding of each Note on the next following Payment Date (after deducting any principal payment to be paid on such Note on that Payment Date) and (ii) for each class, the fraction (each a Note Factor, and together the Note Factors), the numerator of which is equal to the Principal Amount Outstanding of the Notes of that class then outstanding immediately prior to such Determination Date and the denominator of which is equal to the aggregate Principal Amount Outstanding of the Notes of that class then outstanding on the Issue Date. Each determination by the Cash Manager of the Principal Amount Outstanding of a Note and the Note Factor shall in each case (in the absence of wilful default, bad faith or manifest error) be final and binding on all persons. For the purposes of these Conditions: Subject to Condition 6.7 (Appraisal Reduction) the Principal Amount Outstanding of a Note on any date will be its Initial Principal Amount less the aggregate amount of principal repayments (Principal Payments) paid in respect of that Note since the Issue Date. The Issuer will cause each determination of a Principal Amount Outstanding and the Note Factors to be notified in writing forthwith to the Note Trustee, the Paying Agents, the Agent Bank and (for so long as the relevant Class of Notes is listed on the Irish Stock Exchange) the Irish Stock Exchange and will cause notice of each determination of a Principal Amount Outstanding and the Note Factor to be given to the Noteholders in accordance with Condition 15 as soon as reasonably practicable thereafter. If the Issuer or the Cash Manager on behalf of the Issuer does not at any time for any reason determine a Principal Payment, the Principal Amount Outstanding or the Note Factor (in accordance with the preceding provisions of this Condition 6.6), then the Principal Payment, the Principal Amount Outstanding and the Note Factor may be determined by the Note Trustee (but without any liability accruing to the Note Trustee as a result) on its behalf, in accordance with this Condition 6.6, and each such determination or calculation shall be conclusive and shall be deemed to have been made by the Issuer or the Cash Manager, as the case may be. 6.7 Appraisal Reduction The Appraisal Reduction Amount of a Note (to be determined by the Cash Manager) means a pro rata share of the aggregate amount of Appraisal Reduction required to be applied to the relevant class of Notes in accordance with the following sentence. On the Payment Date immediately following any Determination Date on which an Appraisal Reduction is in effect, the principal amount of the Notes will be reduced by an amount equal to such Appraisal Reduction as applied to the classes of Notes in reverse sequential order, beginning with the most subordinated class of Notes then outstanding. The Principal Amount Outstanding of each Class of Notes will be deemed to be reduced in the amount of all Appraisal Reduction Amounts applied to such class for the purposes of the following: (a) the right to attend and vote at any meeting of the Noteholders of any Class or Classes, an Extraordinary Resolution in writing or an Ordinary Resolution in writing and any direction or request by the holders of Notes of any class or classes for the purposes of inter alia, Condition 11 (Enforcement) and Condition 12 (Meetings of Noteholders, Modification and Waiver and Substitution); (b) the determination of how many and which Notes are for the time being outstanding for the purposes of Conditions 10 (Note Events of Default) and 11 (Enforcement); (c) the determination as to whether a Class of Notes is outstanding in relation to any right, discretion, power or authority which the Note Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the Noteholders or any Class or Classes thereof; (d) the determination as to whether a Class of Notes is outstanding in relation to a determination by the Note Trustee whether any event, circumstance, matter or thing is, in its opinion, materially prejudicial to the interests of the Noteholders or any class or classes thereof; and 185

186 (e) for the purpose of the Controlling Class Test, but not, for the avoidance of doubt any other purpose. For these purposes, Appraisal Reduction means, with respect to any Determination Date, the amount by which the principal amount of the Loan then outstanding (together with any unpaid interest, all currently due and unpaid taxes and assessments, insurance premiums due, ground rents due, plus any accrued but unpaid interest on such debt) (net of any amount placed into an escrow account in respect of such items), exceeds 90 per cent. of the appraisal value of the Properties as determined by a Valuation of the Properties. The Issuer will cause each determination of an Appraisal Reduction Amount to be notified in writing forthwith to the Note Trustee, the Issuer Security Trustee and (for so long as the relevant Class of Notes is listed on the Irish Stock Exchange) the Irish Stock Exchange and will cause notice of each determination of an Appraisal Reduction Amount to be given to the Noteholders in accordance with Condition 15 as soon as reasonably practicable thereafter. 6.8 Notice of Redemption Any such notice as is referred to in Conditions 6.3 and 6.4 above shall be irrevocable and, upon the expiration of such notice, the Issuer shall be bound to redeem the Notes in the amounts specified in these Conditions. 6.9 Cancellation All Notes redeemed in full pursuant to the foregoing provisions will be cancelled forthwith and may not be resold or re-issued. 7. PAYMENTS 7.1 Global Notes Payments of principal and interest in respect of any Global Note held by the Common Safekeeper will be made to or to the order of the Common Safekeeper thereof against presentation (and, in the case of final redemption of a Global Note or in circumstances where the unpaid Principal Amount of the related Global Note would be reduced to zero (including as a result of any other payment of principal due in respect of such Global Note), only upon surrender of such Global Note) at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)). A record of each payment so made, distinguishing, in the case of Global Note, between payments of principal and payments of interest and, in the case of partial payments, of the amount of each partial payment shall be entered pro rata in the records of Euroclear and Clearstream, Luxembourg and, upon any such entry being made, the nominal amount of the Notes recorded in the records of Euroclear and Clearstream, Luxembourg and represented by a Global Note shall be reduced by the aggregate principal amount of the Notes redeemed. Payments to holders of interests in such Notes shown in records of Euroclear or Clearstream, Luxembourg as being entitled to receive payments in respect of the Global Notes (such holders being the Euroclear/Clearstream Holders) will be paid in euro. A Euroclear/Clearstream Holder shall receive payments in respect of its interest in any Global Notes in accordance with Euroclear s or, as the case may be, Clearstream, Luxembourg s rules and procedures. None of the persons shown from time to time in the records of Euroclear or Clearstream, Luxembourg as the holder of a Note of the relevant Class shall have any claim directly against the Issuer or the Note Trustee in respect of payments due on such Note whilst such Note is represented by a Global Note and the Issuer or the Note Trustee, as the case may be, shall be discharged by payment of the relevant amount to the bearer of the relevant Global Note. 186

187 7.2 Definitive Notes Payments of principal and interest in respect of Definitive Notes (except where, after such payment, the unpaid principal amount of the relevant Note would be reduced to zero (including as a result of any other payment of principal due in respect of such Note), in which case the relevant payment of principal or interest, as the case may be, will be made against surrender of such Note) will be made against presentation and surrender (in the case of payments of interest only) of Coupons, and (in the case of part payment of principal only) endorsement of the relevant Definitive Note, at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)). 7.3 Laws and Regulations Payments of principal, interest and premium (if any) in respect of any of the Notes are subject in all cases to any fiscal or other laws and regulations applicable thereto. 7.4 Overdue Principal Payments If payment of principal is improperly withheld or refused on or in respect of any Note or part thereof or default is otherwise made in respect of payment, the interest which continues to accrue in respect of such Note or part thereof as referred to in Condition 5.1, will be paid against presentation of such Note at the specified office of any Paying Agent, and in the case of any Definitive Note, will be paid in accordance with Condition Change of Agents The Principal Paying Agent is Deutsche Bank AG, London Branch at its offices at Winchester House, 1 Great Winchester Street, London EC2N 2DB. The Irish Paying Agent is Deutsche International Corporate Services (Ireland) Limited at its offices at 5 Harbourmaster Place, International Financial Services Centre, Dublin 1, Ireland. The Issuer reserves the right (with the prior approval of the Note Trustee) at any time to vary or terminate the appointment of the Principal Paying Agent, any other Paying Agent and the Agent Bank and to appoint additional or other Agents. The Issuer will at all times maintain an Irish Paying Agent with a specified office in Dublin, for so long as the Notes are listed on the Irish Stock Exchange. The Issuer will at all times maintain a Paying Agent in a Member State of the European Union that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to such Directive. The Issuer will cause at least 30 days notice of any change in or addition to the Paying Agents or their specified offices to be given to the Noteholders in accordance with Condition Presentation on Non-Business Days If any Note is presented (if required) for payment on a day which is not a business day in the place where it is so presented, payment shall be made on the next succeeding day that is a business day (unless such business day falls in the next succeeding calendar month in which event payment shall be made on the immediately preceding business day) and no further payments of additional amounts by way of interest, principal or otherwise shall be due in respect of such Note. For the purposes of this Condition 7, business day shall mean, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments in that place. 7.7 Accrual of Interest on Late Payments If interest is not paid in respect of a Note of any class on the date when due and payable (other than because the due date is not a business day (as defined in Condition 7.6) or by reason of non-compliance with Condition 7.1 or 7.2), then such unpaid interest shall itself bear interest 187

188 at the applicable Rate of Interest until such interest and interest thereon is available for payment and notice thereof has been duly given to the Noteholders in accordance with Condition 15, provided that such interest and interest thereon are, in fact, paid. 8. TAXATION All payments in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties or charges of whatsoever nature unless the Issuer or any relevant Paying Agent is required by applicable law in any jurisdiction to make any payment in respect of the Notes subject to any withholding or deduction. In that event, the Issuer or such Paying Agent (as the case may be) shall make such payment after such withholding or deduction has been made and shall account to the relevant authorities for the amount so required to be withheld or deducted. Neither the Issuer nor any Paying Agent will be obliged to make additional payments to holders of Notes in respect of such withholding or deduction. 9. PRESCRIPTION Claims for principal in respect of the Notes and Coupons shall become void unless presented for payment within ten years of the relevant date. Claims for interest in respect of the Notes and Coupons shall become void unless presented for payment within five years of the relevant date. In this Condition 9, the relevant date means the date on which a payment first becomes due, but if the full amount of the moneys payable has not been received by the relevant Paying Agent or the Note Trustee on or prior to such date, it means the date on which the full amount of such moneys shall have been so received and notice to that effect shall have been duly given to the Noteholders in accordance with Condition NOTE EVENTS OF DEFAULT 10.1 Note Events of Default The Note Trustee at its absolute discretion may, and if so requested in writing by not less than 25 per cent. of the holders of the Most Senior Class of Notes then outstanding or if so directed by an Extraordinary Resolution of the holders of the Most Senior Class of Notes shall, and in any case aforesaid subject to the Note Trustee being indemnified and/or secured to its satisfaction, give notice (a Note Acceleration Notice) to the Issuer (copied to the Issuer Security Trustee) declaring all the Notes to be due and repayable, if any of the events mentioned in subparagraphs (a) to (e) inclusive below shall occur (each such event being a Note Event of Default): (a) (b) default is made for a period of three days in the payment of the principal of, or default is made for a period of five days in the payment of interest on, any Class A Note; or, if there are no Class A Notes outstanding, any Class B Note; or, if there are no Class A Notes or Class B Notes outstanding, any Class C Note; or if there are no Class A Notes, Class B Notes or Class C Notes outstanding, any Class D Note; in each case when and as the same becomes due and payable in accordance with these Conditions; or default is made by the Issuer in the performance or observance of any other obligation binding upon it under the Notes of any class, the Note Trust Deed, the Issuer Deed of Charge and Assignment or the other Transaction Documents to which it is party and, in any such case (except where the Note Trustee certifies that, in its opinion, such default is incapable of remedy when no notice will be required), such default continues for a period of 14 days (or such longer period as the Note Trustee may permit at its sole discretion) following the service by the Note Trustee on the Issuer of notice requiring the same to be remedied; or 188

189 (c) the Issuer, otherwise than for the purposes of such amalgamation or reconstruction as is referred to in paragraph (d) below, ceases or, consequent upon a resolution of the board of directors of the Issuer, threatens to cease to carry on business of (in the opinion of the Note Trustee) a substantial part of its business or the Issuer is or is deemed unable to pay its debts as and when they fall due; or (d) an order is made or an effective resolution is passed for the winding-up of the Issuer except a winding-up for the purposes of or pursuant to an amalgamation or reconstruction the terms of which have previously been approved by the Note Trustee in writing or by an Extraordinary Resolution of the holders of the Most Senior Class of Notes then outstanding; or (e) proceedings shall be initiated against the Issuer under any applicable liquidation, insolvency, examinership, composition, reorganisation or other similar laws (including, but not limited to, presentation of a petition for an administration order, the filing documents with the court for the appointment of an administrator or the service of a notice to appoint an administrator) or an administration order shall be granted or the appointment of an administrator takes effect or an administrative receiver or other receiver, liquidator, examiner or other similar official shall be appointed (or formal notice is given of an intention to appoint an administrator) in relation to the Issuer or any part of its undertaking, property or assets, or an encumbrancer shall take possession of all or any part of the undertaking, property or assets of the Issuer, or a distress or execution or other process shall be levied or enforced upon or sued against all or any part of the undertaking, property or assets of the Issuer and such appointment, possession or process is not discharged or does not otherwise cease to apply within 15 days, or the Issuer (or the directors or the shareholders of the Issuer) initiates or consents to judicial proceedings relating to itself under applicable liquidation, insolvency, examinership, composition, reorganisation or other similar laws or makes a conveyance or assignment for the benefit of or a composition or similar arrangement with its creditors generally or takes steps with a view to obtaining a moratorium in respect of any of the indebtedness of the Issuer, provided that in the case of each of the events described in paragraph (b) above, the Note Trustee shall have certified to the Issuer that such event is, in its opinion, materially prejudicial to the interests of the holders of the Most Senior Class of Notes then outstanding. Most Senior Class of Notes shall mean (a) the Class A Notes then outstanding; or (b) if there are no Class A Notes outstanding, the Class B Notes then outstanding; or (c) if there are no Class A Notes or Class B Notes outstanding, the Class C Notes then outstanding; or (d) if there are no Class A Notes, Class B Notes or Class C Notes outstanding, the Class D Notes then outstanding Effect of Declaration by Note Trustee Upon any declaration being made by the Note Trustee in accordance with Condition 10.1 above, all classes of the Notes then outstanding shall immediately become due and repayable at their Principal Amount Outstanding together with accrued interest as provided in the Note Trust Deed, and the Issuer Security and Issuer German Security shall become enforceable. 11. ENFORCEMENT Subject to Condition 19 (Limited Recourse and Non Petition), each of the Note Trustee and the Issuer Security Trustee may, at its discretion and without notice, take such proceedings and/or other action or steps against or in relation to the Issuer or any other person as it may think fit to enforce the provisions of (in the case of the Note Trustee) the Notes, the Note Trust Deed and these Conditions or (in the case of the Note Trustee and the Issuer Security Trustee) the other Transaction Documents to which it is a party and the Issuer Security Trustee may at any time after the Issuer Security or Issuer German Security has become enforceable, at its discretion and without notice, take such steps as it may think fit to enforce the Issuer Security or Issuer German Security and may in its sole discretion consult with the Special Servicer and 189

190 instruct the Special Servicer to take such actions as the Issuer Security Trustee sees fit in connection with such enforcement, but neither the Note Trustee nor the Issuer Security Trustee shall be bound to take any such proceedings, actions or steps unless: (a) (b) (c) subject to the proviso below, it is directed to do so by an Extraordinary Resolution of the Class A Noteholders, the Class B Noteholders, the Class C Noteholders or the Class D Noteholders, or by a request in writing signed by the holders of at least 25 per cent. in aggregate of the Principal Amount Outstanding of the Class A Notes, the Class B Notes, the Class C Notes or the Class D Notes then outstanding; and it shall be indemnified and/or secured to its satisfaction against all actions, proceedings, claims and demands to which it may thereby render itself liable and all liabilities, losses, costs, charges, damages and expenses (including any VAT thereon) which it may incur by so doing, PROVIDED THAT: (i) (ii) (iii) for so long as any Class A Note is outstanding, neither the Note Trustee nor the Issuer Security Trustee shall be bound to act at the direction or request of the Class B Noteholders unless (A) to do so would not, in the opinion of the Note Trustee or the Issuer Security Trustee, as the case may be, be materially prejudicial to the interests of the Class A Noteholders, or (B) such action is sanctioned by, or the Note Trustee or the Issuer Security Trustee, as the case may be, has also been directed to take such action by, an Extraordinary Resolution of the Class A Noteholders or by a notice in writing signed by the holders of at least 25 per cent. in aggregate of the Principal Amount Outstanding of the Class A Notes then outstanding; for so long as any Class A Note or Class B Note is outstanding, neither the Note Trustee nor the Issuer Security Trustee shall be bound to act at the direction or request of the Class C Noteholders unless (A) to do so would not, in the opinion of the Note Trustee or the Issuer Security Trustee, as the case may be, be materially prejudicial to the respective interests of the Class A Noteholders and/or the Class B Noteholders or (B) such action is sanctioned by, or the Note Trustee or the Issuer Security Trustee, as the case may be, has also been directed to take such action by, an Extraordinary Resolution of the Class A Noteholders and the Class B Noteholders or by a notice in writing signed by the holders of at least 25 per cent. in aggregate of the Principal Amount Outstanding of each of the Class A Notes and the Class B Notes then outstanding; and for so long as any Class A Note, Class B Note or Class C Note is outstanding, neither the Note Trustee nor the Issuer Security Trustee shall be bound to act at that direction or request of the Class D Noteholders unless (A) to do so would not, in the opinion of the Note Trustee or the Issuer Security Trustee, as the case may be, be materially prejudicial to the respective interests of the Class A Noteholders, the Class B Noteholders and/or the Class C Noteholders, or (B) such action is sanctioned by, or the Note Trustee or the Issuer Security Trustee, as the case may be, has also been directed to take such action by, an Extraordinary Resolution of each of the Class A Noteholders, the Class B Noteholders and the Class C Noteholders or by a notice in writing signed by the holders of at least 25 per cent. in aggregate of the Principal Amount Outstanding of each of the Class A Notes, the Class B Notes and the Class C Notes then outstanding. No Noteholder shall be entitled to proceed directly against the Issuer or any other party to the Transaction Documents or to enforce the Issuer Security or Issuer German Security unless the Note Trustee or, as the case may be, the Issuer Security Trustee, having become bound to do so, fails to do so within a reasonable period and such failure shall be continuing, provided that in any event no Noteholder shall be entitled to take proceedings for the winding up, liquidation, examinership or administration of the Issuer. The Issuer Security Trustee cannot, while any of the Notes are outstanding, be required to enforce the 190

191 Issuer Security or Issuer German Security at the request of any other Issuer Secured Party under the Issuer Deed of Charge and Assignment or the German Security Assignment Agreement or otherwise. (d) If the net proceeds of realisation of, or enforcement with respect to, the Issuer Security and Issuer German Security are not sufficient to make all payments due in respect of the Notes, the Issuer s other assets will not be available for payment of any shortfall arising therefrom, which shortfall will be borne among the Issuer Secured Creditors and among the Noteholders in accordance with the provisions of these Conditions, the Issuer Deed of Charge and Assignment and the Cash Management and Issuer Account Bank Agreement. All claims in respect of such shortfall, after realisation of or enforcement with respect to all of the Issuer Security and Issuer German Security, shall be extinguished and the Issuer Security Trustee, the Note Trustee, the Noteholders and the other Issuer Secured Creditors shall have no further claim against the Issuer in respect of such unpaid amounts. Each Noteholder, by subscribing for or purchasing Notes, as applicable, is deemed to acknowledge and accept that it is fully aware that (A) in the event of realisation or enforcement of the Issuer Security and Issuer German Security, its right to obtain payment of interest and repayment of principal of the Notes in full is limited to recourse against the undertaking, property and assets of the Issuer comprised in the Issuer Security and Issuer German Security, and (B) the Issuer will have duly and entirely fulfilled its payment obligations by making available to such Noteholder its relevant proportion of the proceeds of realisation or enforcement of the Issuer Security and Issuer German Security in accordance with these Conditions, the Issuer Deed of Charge and Assignment and the Cash Management and Issuer Account Bank Agreement, and all claims in respect of any shortfall will be extinguished. 12. MEETINGS OF NOTEHOLDERS, MODIFICATION AND WAIVER AND SUBSTITUTION (a) The Note Trust Deed contains provisions for convening meetings of the Class A Noteholders, meetings of the Class B Noteholders, meetings of the Class C Noteholders and meetings of the Class D Noteholders to consider any matter affecting their interests including the sanctioning by Extraordinary Resolution of, among other things, the removal of the Note Trustee, a modification of the Notes or the Note Trust Deed (including these Conditions) and/or the provisions of any of the other Transaction Documents. Except as otherwise provided in the Transaction Documents: (b) an Extraordinary Resolution of the Class A Noteholders shall be binding on all the Class B Noteholders, Class C Noteholders and Class D Noteholders, irrespective of the effect upon them, except that no Extraordinary Resolution to sanction a modification (including a Basic Terms Modification (as defined in Condition 12(h)) of, or a waiver or authorisation of any breach or proposed breach of any of the provisions of, the Note Trust Deed, these Conditions or any of the other Transaction Documents, shall take effect unless it shall have been sanctioned by an Extraordinary Resolution of each of the Class B Noteholders, the Class C Noteholders and the Class D Noteholders or it shall not, in the opinion of the Note Trustee in its sole discretion, be materially prejudicial to the respective interests of the Class B Noteholders, the Class C Noteholders and the Class D Noteholders; (c) an Extraordinary Resolution of the Class B Noteholders (other than as referred to in Condition12(b)) shall not be effective for any purpose unless: (i) the Note Trustee is of the opinion that it would not be materially prejudicial to the interests of the Class A Noteholders; or (ii) it is sanctioned by an Extraordinary Resolution of the Class A Noteholders; or (iii) none of the Class A Notes remain outstanding; (d) An Extraordinary Resolution of the Class B Noteholders shall be binding on the Class C Noteholders and the Class D Noteholders, irrespective of the effect on them, except that no Extraordinary Resolution of the Class B Noteholders to sanction a modification (including a Basic Terms Modification) of, or a waiver or authorisation of any breach or proposed breach of 191

192 (e) (f) (g) (h) any of the provisions of the Note Trust Deed, these Conditions or any of the other Transaction Documents, shall take effect unless it shall have been sanctioned by an Extraordinary Resolution of each of the Class C Noteholders and the Class D Noteholders, or it shall not, in the opinion of the Note Trustee in its sole discretion, be materially prejudicial to the respective interests of the Class C Noteholders and the Class D Noteholders; an Extraordinary Resolution of the Class C Noteholders (other than as referred to in Condition 12(b) or 12(d)) shall not be effective for any purpose unless: (i) the Note Trustee is of the opinion that it would not be materially prejudicial to the respective interests of the Class A Noteholders and the Class B Noteholders; or (ii) it is sanctioned by an Extraordinary Resolution of each of the Class A Noteholders and the Class B Noteholders, as applicable; or (iii) none of the Class A Notes and the Class B Notes remain outstanding; an Extraordinary Resolution of the Class C Noteholders shall be binding on the Class D Noteholders, irrespective of the effect on them, except that no Extraordinary Resolution of the Class C Noteholders to sanction a modification (including a Basic Terms Modification) of, or a waiver or authorisation of any breach or proposed breach of any of the provisions of the Note Trust Deed, these Conditions or any of the other Transaction Documents, shall take effect unless it shall have been sanctioned by an Extraordinary Resolution of the Class D Noteholders, or it shall not, in the opinion of the Note Trustee, in its sole discretion, be materially prejudicial to the interests of the Class D Noteholders; an Extraordinary Resolution of the Class D Noteholders (other than as referred to in Condition 12(b),12(d) or 12(f)) shall not be effective for any purpose unless: (i) the Note Trustee is of the opinion that it would not be materially prejudicial to the respective interests of the Class A Noteholders, the Class B Noteholders and the Class C Noteholders; or (ii) it is sanctioned by an Extraordinary Resolution of each of the Class A Noteholders, the Class B Noteholders and the Class C Noteholders, as applicable; or (iii) none of the Class A Notes, the Class B Notes and the Class C Notes remain outstanding. Subject as provided below, the quorum at any meeting of the Noteholders of any class for passing an Extraordinary Resolution shall be one or more persons holding or representing a clear majority in Principal Amount Outstanding of the Notes of such class or, at any adjourned meeting, one or more persons being or representing Noteholders of such class whatever the Principal Amount Outstanding of Notes so held or represented. The quorum at any meeting of the Noteholders of any class of Noteholders for passing an Extraordinary Resolution (a) sanctioning a modification of the date of maturity of the Notes (or any of them); (b) which would have the effect of modifying any day for the payment of interest or principal on the Notes (or any of them); (c) which would have the effect of increasing, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Notes (or any of them); (d) which would have the effect of modifying the method of calculating the amount payable or the date of payment or the priority of payment in respect of any interest or principal in respect of the Notes (or any of them); (e) modifying or which would have the effect of modifying the definition of Basic Terms Modification; (f) altering the currency of payment of the Notes (or any of them); (g) which would have the effect of altering the quorum or majority required to pass an Extraordinary Resolution; and (h) which would have the effect of releasing, or modifying any provisions in respect of, or altering the order of priorities in relation to the realisation of, the Issuer Security and Issuer German Security (or any part thereof) (each a Basic Terms Modification) shall be one or more persons present holding Notes of such class or voting certificates in respect thereof or being proxies representing not less than 75 per cent. of the Principal Amount Outstanding of the Notes of the relevant class for the time being outstanding, or at any adjourned such meeting, not less than 33? per cent. of the Principal Amount Outstanding of the Notes of the relevant class for the time being outstanding. Written notice of such modifications shall be provided to the Irish Stock Exchange. 192

193 (i) An Extraordinary Resolution passed at any meeting of the Noteholders of any Class shall be binding on all Noteholders of such class whether or not they are present at such meeting. (i) The Note Trustee or, as the case may be, the Issuer Security Trustee may agree, without the consent of the Noteholders of any class, (a) to any modification of, or to any waiver or authorisation of any breach or proposed breach of any provisions of the Notes, the Note Trust Deed, these Conditions or any of the other Transaction Documents which, in the opinion of the Note Trustee, or, as the case may be, the Issuer Security Trustee, is not materially prejudicial to the interests of the Noteholders of any class, or (b) to any modification of the Notes, the Note Trust Deed, these Conditions or any of the other Transaction Documents which, in the opinion of the Note Trustee, or, as the case may be, the Issuer Security Trustee, is to correct a manifest error or a proven (to the satisfaction of the Note Trustee or, as the case may be, the Issuer Security Trustee) error or is of a formal, minor or technical nature, and the Note Trustee may also, without the consent of the Noteholders of any class, determine that a Note Event of Default shall, or shall not, subject to specified conditions, be treated as such; provided always that neither the Note Trustee nor the Issuer Security Trustee shall exercise such powers of waiver, authorisation or determination in contravention of any direction or request given by the holders of the Most Senior Class of Notes then outstanding pursuant to Condition 10 (provided that no such direction or request shall affect any authorisation, waiver or determination previously made or given). Any such modification, waiver, authorisation or determination shall be binding on the Noteholders and, unless the Note Trustee agrees otherwise, any such modification shall be notified to the Noteholders as soon as practicable thereafter in accordance with Condition 15. (ii) Where the Note Trustee or the Issuer Security Trustee is required, in connection with the exercise of its powers, trusts, authorities, duties and discretions, to have regard to the interests of the Noteholders or, as the case may be, the Noteholders of any class, it shall have regard to the interests of such Noteholders as a class and, in particular, but without prejudice to the generality of the foregoing, the Note Trustee or, as the case may be, the Issuer Security Trustee shall not have regard to, or be in any way liable for, the consequences of such exercise for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory and the Note Trustee or, as the case may be, the Issuer Security Trustee shall not be entitled to require, nor shall any Noteholder be entitled to claim, from the Issuer or the Note Trustee or the Issuer Security Trustee or any other person, any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders. (iii) Each of the Note Trustee and the Issuer Security Trustee is entitled to determine, in its own opinion, for the purposes of exercising any power, trust, authority, duty or discretion under or in relation to the Notes, the Conditions or any of the Transaction Documents, that such exercise will not be materially prejudicial to the interests of the Noteholders or any Class of Noteholders and in making such a determination may take into account among any other things it may, in its absolute discretion, consider necessary and/or appropriate, any confirmation by a Rating Agency, whether or not addressed to the Note Trustee or, as the case may be, the Issuer Security Trustee (if available) that the then current ratings of the Notes or, as the case may be, the Notes of such class will not be downgraded, withdrawn or qualified by such exercise. (iv) The Note Trustee may, without the consent of the Noteholders, agree with the Issuer to the substitution in place of the Issuer (or of any previous substitute under this condition) as the principal debtor in respect of the Notes and the Note Trust Deed of another body corporate (being a single purpose vehicle) provided that each Rating Agency then rating the Notes has confirmed in writing to the Note Trustee and the Issuer Security Trustee that such substitution would not adversely affect the ratings of the Notes and provided further that such substitution would not in the opinion of the Note Trustee be materially prejudicial to the interests of the Noteholders for any class and subject to certain other 193

194 conditions set out in the Note Trust Deed. The Irish Stock Exchange shall be notified of any such substitution, a supplemental prospectus will be prepared and filed with the Irish Stock Exchange and notice of the substitution will be notified to the Noteholders in accordance with Condition 15 as soon as practicable thereafter. 13. INDEMNIFICATION AND EXONERATION OF THE NOTE TRUSTEE AND THE ISSUER SECURITY TRUSTEE The Note Trust Deed, the Issuer Deed of Charge and Assignment and certain of the other Transaction Documents contain provisions governing the responsibility (and relief from responsibility) of the Note Trustee and the Issuer Security Trustee and for indemnification in certain circumstances, including provisions relieving them from taking enforcement proceedings or, in the case of the Issuer Security Trustee, enforcing the Issuer Security or Issuer German Security unless indemnified and/or secured to its satisfaction. Neither the Note Trustee nor the Issuer Security Trustee will be responsible for any loss, expense or liability which may be suffered as a result of any assets comprised in the Issuer Security or Issuer German Security, or any deeds or documents of title thereto, being uninsured or inadequately insured or being held by or to the order of other parties to the Transaction Documents, clearing organisations or their operators or by intermediaries such as banks, brokers, depositories, warehousemen or other similar persons whether or not on behalf of the Note Trustee or the Issuer Security Trustee. The Note Trust Deed and the Issuer Deed of Charge and Assignment contain provisions pursuant to which each of the Note Trustee and the Issuer Security Trustee or any of their related companies is entitled, among other things, (a) to enter into business transactions with the Issuer and/or any other person who is a party to the Transaction Documents or whose obligations are comprised in the Issuer Security or Issuer German Security and/or any of their subsidiary or associated companies and to act as trustee for the holders of any other securities issued by or relating to the Issuer and/or any other person who is a party to the Transaction Documents or whose obligations are comprised in the Issuer Security or Issuer German Security and/or any of their subsidiary or associated companies, (b) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of the Noteholders or any other Issuer Secured Creditor, and (c) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith. The Issuer Deed of Charge and Assignment provides that the Issuer Security Trustee shall accept without investigation, requisition or objection such right and title as the Issuer may have to the Issuer s property secured pursuant to the Issuer Deed of Charge and Assignment or the German Security Assignment Agreement and shall not be bound or concerned to examine such right and title, and the Issuer Security Trustee shall not be liable for any defect or failure in the right or title of the Issuer to the property secured pursuant to the Issuer Deed of Charge and Assignment or the German Security Assignment Agreement whether such defect or failure was known to the Issuer Security Trustee or might have been discovered upon examination or enquiry and whether capable of remedy or not. Neither the Note Trustee nor the Issuer Security Trustee has any responsibility in relation to the adequacy, validity, sufficiency and enforceability of the Issuer Security or Issuer German Security. Neither the Note Trustee nor the Issuer Security Trustee will be obliged to take any action which might result in its incurring personal liabilities unless indemnified and/or secured to its satisfaction or to supervise the performance by the Issuer, the Agents, the Servicer, the Special Servicer, the Cash Manager, the Liquidity Facility Provider, the Basis Swap Counterparty or any other person of their respective obligations under the Transaction Documents or the Issuer Security or the Issuer German Security and each of the Note Trustee and the Issuer Security Trustee shall assume, until it has actual knowledge to the contrary, that all such persons are properly performing their duties, notwithstanding that the Issuer Security or Issuer German Security (or any part thereof) may, as a consequence, be treated as floating rather than fixed security. 194

195 14. REPLACEMENT OF GLOBAL NOTES AND DEFINITIVE NOTES If any Global Note, Definitive Note, Coupon or Talon is mutilated, defaced, lost, stolen or destroyed, it may be replaced at the specified office of any Paying Agent upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence and indemnity as the Issuer, the Paying Agent or the Note Trustee may reasonably require. Mutilated or defaced Global Notes, Definitive Notes, Coupons or Talons must be surrendered before replacements will be issued. 15. NOTICE TO NOTEHOLDERS (a) All notices, other than notices given in accordance with the following paragraphs of this Condition 15, to Noteholders shall be deemed to have been validly given if published in a leading daily newspaper printed in the English language and with general circulation in Dublin (which is expected to be The Irish Times) or, if that is not practicable, in such English language newspaper or newspapers as the Note Trustee shall approve having a general circulation in Dublin. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication shall have been made in the newspaper or newspapers in which publication is required. For so long as the Notes of any class are represented by Global Notes held by the Common Safekeeper, notices to the holders of such Notes will be validly given if published as described above or, at the option of the Issuer and for so long as the Notes are listed on the Irish Stock Exchange and the rules of the Irish Stock Exchange so allow, if delivered to Euroclear and/or Clearstream, Luxembourg for communication by them to their participants and for communication by such participants to entitled accountholders and, for so long as the rules of the Irish Stock Exchange so require, with a copy to the Company Announcements Office of the Irish Stock Exchange. Any notice delivered to Euroclear and/or Clearstream, Luxembourg as aforesaid shall be deemed to have been given on the day on which it is delivered to Euroclear or Clearstream, Luxembourg. For so long as the Notes of any Class are represented by a Global Note not held by a Common Safekeeper, notices to Noteholders will be validly given if delivered to the bearer of that Global Note. (b) (c) (d) Any notice specifying a Payment Date, a Rate of Interest, an Interest Amount or a Principal Amount Outstanding shall be deemed to have been duly given if the information contained in such notice appears on the relevant page of the Bloomberg Screen or such other medium for the electronic display of data as may be previously approved in writing by the Note Trustee and notified to the Noteholders pursuant to Condition 15(a) above. Any such notice shall be deemed to have been given on the first date on which such information appeared on the relevant screen. If it is impossible or impracticable to give notice in accordance with this paragraph then notice of the matters referred to in this paragraph shall be given in accordance with Condition 15(a) above. A copy of each notice given in accordance with this Condition 15 shall be provided to (for so long as the Notes of any class are listed on the Irish Stock Exchange) the Company Announcements Office of the Irish Stock Exchange, to Moody s Investor Services Limited (Moody s), Standard & Poor s Ratings Services (a division of The McGraw-Hill Companies, Inc.) (S&P), and Fitch Ratings Ltd. (Fitch, together with S&P and Moody s, the Rating Agencies), to which reference in these Conditions shall include any additional or replacement rating agency appointed by the Issuer, with the prior written approval of the Note Trustee, to provide a credit rating in respect of the Notes or any class thereof). For the avoidance of doubt, and unless the context otherwise requires, all references to rating and ratings in these Conditions shall be deemed to be references to the ratings assigned by the Rating Agencies. The Note Trustee shall be at liberty to sanction some other method of giving notice to the Noteholders or to a class or category of them if, in its opinion, such other method is reasonable having regard to market practice then prevailing and to the requirements of the stock exchange on which the Notes are then listed and provided that notice of such other method is given to the Noteholders in such manner as the Note Trustee shall require. 195

196 16. PRIVITY OF CONTRACT The Notes do not confer any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Notes, but this does not affect any right or remedy of a third party which exists or is available apart from the Contracts (Rights of Third Parties) Act GOVERNING LAW AND SUBMISSION TO JURISDICTION The Notes, the Note Trust Deed, the Issuer Deed of Charge and Assignment, the Agency Agreement, the Liquidity Facility Agreement, the Cash Management and Issuer Account Bank Agreement, the Servicing Agreement and the other Transaction Documents (other than the Corporate Services Agreement, the Declaration of Trust, the Loan Sale Agreement and the German Security Assignment Agreement) are governed by English law. The Corporate Services Agreement and the Declaration of Trust are governed by the laws of the Republic of Ireland. The Loan Sale Agreement and the German Security Assignment Agreement are governed by the laws of the Federal Republic of Germany. The Issuer has in the Note Trust Deed irrevocably agreed for the benefit of the Note Trustee and the Noteholders that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the Note Trust Deed and accordingly has submitted to the exclusive jurisdiction of the English courts. The Issuer has in the Note Trust Deed waived any objection to the courts of England on the grounds that they are an inconvenient or inappropriate forum. The Note Trustee and the Noteholders may take any suit, action or proceeding arising out of or in connection with the Note Trust Deed (together referred to as Proceedings) against the Issuer in any other court of competent jurisdiction and concurrent Proceedings in any number of jurisdictions. The Issuer has, in the Note Trust Deed, irrevocably and unconditionally appointed Law Debenture Corporate Services Limited as its agent for service of process in England in respect of any Proceedings and has undertaken that in the event of such agent ceasing so to act it will appoint such other person as the Trustee may approve as its agent for that purpose. 18. CONTROLLING CLASS The Most Junior Class of Notes outstanding shall be the Controlling Class if at the relevant time it meets the Controlling Class Test. A Class of Notes will meet the Controlling Class Test if it has a total Principal Amount Outstanding which is not less than 25 per cent. of the Principal Amount Outstanding of such Class of Notes on the Issue Date. If the Most Junior Class of Notes outstanding does not meet the Controlling Class Test, the next Most Junior Class of Notes outstanding that does meet the Controlling Class Test will be the Controlling Class. If no Class of Notes has a Principal Amount Outstanding that satisfies the Controlling Class Test then the Controlling Class will be the Most Junior Class of Notes then outstanding. For the avoidance of doubt, the Principal Amount Outstanding of a Class of Notes for the purposes of calculating the Controlling Class Test shall be the Principal Amount Outstanding of such Class less any Appraisal Reduction Amounts that have been applied to that Class. The Controlling Class may from time to time appoint by way of an Extraordinary Resolution not more than one Noteholder of such class to be their representative for the purposes of this Condition (each such person, an Operating Advisor). Any Operating Advisor so appointed will have the rights set forth in the Servicing Agreement. Any Operating Advisor shall, unless instructed to the contrary in writing by the majority (by principal amount outstanding) of persons who constitute the Controlling Class, be entitled in its sole discretion to exercise all of the rights given to it pursuant to the Servicing Agreement as it sees fit. The appointment of any Operating Advisor shall not take effect until it notifies the Issuer, the Note Trustee, the Issuer Security Trustee, the Servicer and the Special Servicer in writing (attaching a copy of the relevant Extraordinary Resolution) of its appointment. 196

197 The Controlling Class may by Extraordinary Resolution (notified in writing to the Issuer, the Note Trustee, the Issuer Security Trustee, the Servicer and the Special Servicer) terminate the appointment of any Operating Advisor. Any Operating Advisor may retire by giving not less than 21 days notice in writing to the Noteholders of the Controlling Class (in accordance with the terms of Condition 15), the Issuer, the Note Trustee, the Issuer Security Trustee, the Servicer and the Special Servicer. Each Noteholder acknowledges and agrees, by its purchase of the Notes, that: (a) the Operating Advisor may have special relationships and interests that conflict with those of the holders of one or more classes of the Notes; (b) the Operating Advisor may act solely in the interests of the Controlling Class; (c) the Operating Advisor does not have any duties to any Noteholders other than the Controlling Class; (d) the Operating Advisor may take actions that favour the interests of the Noteholders of the Controlling Class over the interests of the other Noteholders; (e) the Operating Advisor will not be deemed to have been negligent or reckless, or to have acted in bad faith or engaged in wilful misconduct, by reason of its having acted solely in the interests of the Controlling Class; and (f) the Operating Advisor will have no liability whatsoever for having acted solely in the interests of the Controlling Class, and no holder of any other Class of Notes may take any action whatsoever against the Operating Advisor for having so acted. Most Junior Class of Notes shall mean: (a) the Class D Notes then outstanding; or (b) if there are no Class D Notes outstanding, the Class C Notes then outstanding; or (c) if there are no Class D or Class C Notes outstanding, the Class B Notes then outstanding; or (d) if there are no Class D Notes, Class C Notes or Class B Notes, the Class A Notes then outstanding. 19. LIMITED RECOURSE AND NON PETITION The Notes constitute direct, secured, and limited recourse obligations of the Issuer. Interest and principal on the Notes will be payable only from, and to the extent of, sums paid to, or net proceeds recovered by or on behalf of the Issuer or the Issuer Security Trustee in respect of the Issuer Security and Issuer German Security in accordance with the terms of the Issuer Deed of Charge and Assignment and German Security Assignment Agreement respectively and no other assets of the Issuer available for any further payments and any outstanding claims shall be extinguished. The Issuer Security Trustee and the other Issuer Secured Creditors will look solely to such sums and proceeds and the rights of the Issuer in respect of the Issuer Security and the Issuer German Security for payments to be made by the Issuer. The obligations of the Issuer to make such payments will be limited to such sums and the proceeds of realisation of the Issuer Security and the Issuer Security Trustee and the other Issuer Secured Creditors will have no further recourse in respect thereof. Having realised the Issuer Security and Issuer German Security and distributed the net proceeds in accordance with the terms of the Issuer Deed of Charge and Assignment, none of the Issuer Security Trustee nor any other Issuer Secured Creditor may take any further steps against the Issuer to recover any sum still unpaid and the Issuer s liability for any sum still unpaid shall be extinguished. Only the Issuer Security Trustee may pursue the remedies available under applicable law, under the Issuer Deed of Charge and Assignment and under the Transaction Documents to enforce the rights of the Issuer Secured Creditors against the Issuer and no other Secured Creditor shall be entitled to proceed directly against the Issuer, unless the Issuer Security Trustee having been bound to take steps and/or proceedings, fails to do so within a reasonable time and such failure is continuing. Notwithstanding the provisions of any other Conditions, none of the parties to the Transaction Documents shall be entitled to petition or take any corporate action or other steps or legal proceedings for the winding-up, dissolution, court protection, examinership, reorganisation, liquidation, bankruptcy or insolvency of the Issuer or for the appointment of a receiver, administrator, receiver, or manager, administrative receiver, trustee, liquidator, examiner, sequestrator or similar officer in respect of the Issuer or any of its revenues or assets for so long as the Notes are outstanding or for two years and a day after all sums outstanding and owing in respect of the Notes have been paid in full, provided that the Issuer Security Trustee may 197

198 prove or lodge a claim in liquidation of the Issuer initiated by another party and provided further that the Issuer Security Trustee may take proceedings to obtain a declaration or similar judgment or order as to the obligations and liabilities of the Issuer, or to appoint an administrator, a manager, a receiver, including an administrative receiver or similar officer, under the Issuer Deed of Charge and Assignment and/or the German Security Assignment Agreement. None of the parties to the Transaction Documents shall have any recourse against any director, shareholder, or officer of the Issuer in respect of any obligations, covenant or agreement entered into or made by the Issuer pursuant to the terms of the Issuer Deed of Charge and Assignment or any other Transaction Document to which it is a party or any notice or documents which it is requested to deliver hereunder or thereunder. 198

199 CERTAIN MATTERS OF GERMAN LAW This section summarises certain aspects of German law and practices in force at the date hereof relating to the transactions described in this Prospectus. It does not purport to be a complete analysis and should not, therefore, be treated as a substitute for comprehensive professional, legal and tax advice on the relevant matters, nor on any issue which may be relevant in the context of this Prospectus. Introduction The Loan is secured by commercial properties located in Germany pursuant to security interests created and perfected under German law. The Borrower is an entity organised under German law. As such, the laws of Germany will have an impact on the process by which the Borrower Security is enforced. Further, the laws of Germany may determine how the insolvency of the Borrower will affect the enforcement of the Borrower Security. Enforcement of the Borrower German Security Enforcement of the Land Charges Pursuant to the German Compulsory Auction and Compulsory Administration of Immoveable Property Act (ZVG), enforcement of the Land Charges under German law will be carried out by the Borrower Security Trustee or any representative or legal counsel appointed by the Borrower Security Trustee may in its discretion from time to time) in accordance with the ZVG. Enforcement of the Land Charges will be effected either by way of: (a) a compulsory sale of one or more Properties (Zwangsversteigerung); and/or (b) a compulsory administration of one or more Properties (Zwangsverwaltung). Compulsory Sale In the case of a compulsory sale, the German court will effect the sale of the Properties by way of a public auction. The organisation of such auction and the sale of the Properties therein may take a considerable amount of time (likely to be more than one year and, depending upon the workload of the court, possibly significantly longer, especially if an insolvency administrator should request a suspension of the sale). If the highest bid at the auction is not at least 70 per cent. of the market value of the Properties as estimated by the court, any person who has an interest in the outcome of the decision (Berechtigter) and is a person ranking behind the most senior enforcing creditor with claims that would not be fully satisfied after the distribution of the proceeds, may require the court not to sell the Properties to the relevant bidder and to effect a second auction. The enforcing creditor may oppose such request by providing prima facie evidence that the non-acceptance of the bid would cause the enforcing creditor an unreasonable disadvantage. In no event may the court dispose of the Properties if the highest bid in the first auction does not reach 50 per cent. of the estimated value of the Properties. If a second auction is necessary because the highest bid in the first auction was too low, the highest bid in such further auction does not need to meet any threshold with regard to the estimated value of the Properties. The net proceeds of the sale of the Properties at auction (less certain enforcement costs and payment to certain categories of preferred creditors) will be applied, together with any amount payable to the Borrower on any related insurance contracts (to the extent such contracts may be applied in repayment of the Loan) to reimburse any amounts due and unpaid to the Issuer as mortgagee under the Land Charge. Compulsory Administration In a compulsory administration the German court will appoint an administrator to administer (Zwangsverwaltung) the Properties on behalf of the enforcing creditors. The administrator alone is entitled to receive all income generated from the property including all rents and insurance claims. The right of the administrator to collect rents takes priority over all other rights to the rent stream. The administrator, subject to the supervision of the court, passes the collected monies on to the enforcing creditors after deducting ongoing costs and enforcement costs calculated in accordance with the Compulsory Administrator Remuneration Act which came into force on 4 January The enforcing creditor will receive the interest payments and a certain amount of amortisation of its 199

200 principal after payment of ongoing costs for the administration and maintenance of the Properties and ongoing public charges relating to the Properties. Ranking The proceeds of a compulsory sale or a compulsory administration will be used to pay the claims described in paragraphs (a) to (h) below (the Claims) by allocating them to classes (the Grades and each a Grade) in the order set out below. Creditors whose Claims fall within a certain Grade will only be paid upon satisfaction in full of the Claims of creditors falling within higher Grades. In a compulsory sale of the Properties, the Borrower Security Trustee will generally rank in Grade 4. (a) Grade 1a: In the event of a compulsory administration, the enforcing creditor s expense claims in relation to maintenance or necessary improvement of the Properties (in the case of compulsory sale such claims will only be satisfied if (i) the compulsory administration continues until adjudication of the Properties pursuant to the public auction and (ii) the maintenance costs cannot be covered from the administration of the Properties). (b) Grade 1b: In the event of a compulsory sale where insolvency proceedings have been opened over the debtor s estate the costs for determination of the movable assets which are included in the public auction, a flat fee of 4 per cent. of the value of such movable assets will be payable to the insolvency administrator. (c) Grade 2: Certain costs relating to land used for agricultural or forestry purposes. (d) Grade 3: Public charges on the Properties for any arrears in the last four years. However, periodic charges (wiederkehrende Leistungen), such as real property tax, interest, extra charges, annuities, and certain other claims are in this rank only for ongoing claims and arrears for the last two years. (e) Grade 4: Claims resulting from rights relating to the Properties (for example Land Charges), but only to the extent they have not become ineffective vis-à-vis the enforcing creditor as a consequence of the attachment of the Properties, including all claims resulting from such amounts which are payable for a gradual repayment of a debt as an extra charge on the interest payments. Claims resulting from periodic charges, for example, interest, extra charges, administrative costs, annuities are in this Grade only for ongoing claims and arrears for the last two years. (f) Grade 5: The enforcing creditor s claims to the extent they will not be satisfied in one of the above Grades. (g) Grade 6: The rights relating to the Properties to the extent they have become ineffective vis-à-vis the enforcing creditor as a consequence of the attachment of the Properties. (h) Grade 7: The claims of the third Grade for any arrears not covered thereunder. (i) Grade 8: The claims of the fourth Grade for any arrears not covered thereunder. Rights ranking in the fourth Grade As stated above, in a compulsory sale of the Properties, the Borrower Security Trustee will rank in Grade 4, but Claims of the Borrower Security Trustee resulting from periodic charges (especially claims for interest, extra charges, administrative costs, annuities) will be in this Grade only for ongoing claims and arrears for the preceding two years. Depending on the due dates for interest up to three years of interest may effectively be covered. Therefore, creditors falling into Grades 1 to 3 (if any) must be fully satisfied out of the proceeds of the compulsory sale or compulsory administration before amounts can be paid to satisfy the claims under the Loan. If the creditor secured by the Land Charge applies for a compulsory sale of the Properties, all rights ranking prior to such creditor in division II and III of the land register will continue to be registered after a compulsory sale, whilst all rights ranking behind the creditor will be deleted. In the event of a compulsory administration the same rule applies; however, prior to distributing (in the above order) the proceeds resulting from the usage of the Properties, the costs of administration and enforcement proceedings will be deducted. Pursuant to Section 155 (2) ZVG, in the event of a compulsory administration only current periodic charges will rank in the fourth Grade. Arrears and principal will rank in the fifth Grade. 200

201 The right to satisfy claims secured by the Land Charge also includes the re-disbursal of costs triggered by the termination of the Land Charge (but does not include costs for acceleration of the claims) and the legal costs. In principle, the Claims within each Grade rank pari passu amongst themselves. Satisfaction of the Claims in the Grades 4, 6 and 8 will occur in the order in which such Claims rank amongst themselves. The Claims ranking in the fifth Grade will be satisfied in accordance with the order in which the Properties have been attached. Any Claim will be satisfied in the following order: (i) costs, (ii) periodic charges and other additional charges, (iii) principal. Insolvency under German Law The German insolvency code (Insolvenzordnung) (the German Insolvency Code) provides for only one insolvency procedure. Insolvency proceedings are initiated at the request of the debtor or at the request of a creditor, should there be grounds for insolvency (Insolvenzeröffnungsgrund). Such grounds are present if the debtor is insolvent (zahlungsunfähig) or if illiquidity of the debtor is imminent according to the German Insolvency Statute (drohende Zahlungsunfähigkeit). If the debtor is a legal entity, over-indebtedness (Überschuldung) also constitutes grounds for initiation of insolvency proceedings. Commencement of Insolvency Proceedings Generally speaking, insolvency proceedings can be divided into the opening procedure, i.e. the procedure between the petition for insolvency proceedings and the decision by the insolvency court to open the proceedings, and the proper insolvency proceedings, i.e. the proceedings after the opening procedure. A creditor is entitled to file a petition if he has a legal interest in the commencement of the insolvency proceeding and can furnish prima facie evidence of his claim and sufficient grounds for the insolvency. The petition has to be filed with the relevant insolvency court; this is the German local court (Amtsgericht) which has jurisdiction over the debtors place of incorporation. The petition does not have to be in any special form. A creditor has a legal interest (rechtliches Interesse) in filing an insolvency petition if he has a valid claim and is not sufficiently secured. Creditors which have a preferential right (Absonderungsrecht) have to satisfy their claims outside of the insolvency proceedings. The insolvency court will decide whether the insolvency petition is admissible or not. During this decision process, the court has to implement all necessary measures in order to protect the interests of all the creditors until a decision with respect to the petition is made. This may result in the insolvency court appointing an interim insolvency administrator (vorläufiger Insolvenzverwalter). Additionally, the court may, inter alia, (a) prohibit or temporarily restrain the debtor from disposing of any of its assets (allgemeines Verfügungsverbot), in which case the right of administration and disposal of its assets is transferred to the insolvency administrator who then has to assess if the assets cover the costs of the insolvency proceedings or (b) prohibit or temporarily enjoin any acts of execution (such as enforcement of land charges) on the debtors assets, excluding immovables (Vollstreckungsverbot). Opening of Insolvency Proceedings If the conditions for opening the insolvency proceedings are met, the insolvency court will open the insolvency proceedings through a formal order and appoint an insolvency administrator (Insolvenzverwalter). If the conditions outlined above are not met, or if the remaining assets are not sufficient to cover the cost of the proceedings, then the insolvency court will deny the opening of proceedings by virtue a formal order. The party filing for insolvency is always entitled to lodge an appeal against the order, and, in addition, the debtor (who has not filed for insolvency) is entitled to lodge an appeal against a denial based on insufficient assets. The insolvency court then issues an order of commencement in which it requests that the creditors inform the insolvency administrator, without undue delay, about any rights of segregation or preferential rights which they wish to assert in respect to movables or the debtor s rights. The order of commencement also stipulates that the creditors must register their claims in writing with the 201

202 insolvency administrator. Any undisputed claims are deemed to be determined and their registration in the insolvency schedule (Insolvenztabelle) will be subject to a final judgment and therefore serve as a basis for execution after termination of the insolvency procedure (Aufhebung des Insolvenzverfahrens). With the commencement of the insolvency proceeding, the debtor loses the right to manage and to dispose of its assets. These rights transfer to the appointed insolvency administrator. The insolvency administrator assumes the management, the administration and the possession of all assets. The insolvency administrator is required to prepare a list of the assets (Verzeichnis der Massegegenstände), a list of creditors (GIäubigerverzeichnis) and a summary of the assets and liabilities (Vermögensübersicht) which must be submitted to the insolvency court no later than one week prior to the information hearing at the creditor s assembly. In order to prepare the summary, the insolvency administrator must use the debtor s books and business correspondence, as well as information provided by the creditors. The insolvency court must supervise the insolvency administrator and, if warranted, has the right to dismiss the administrator from his position. In the first creditors assembly (Gläubigerversammlung), the creditors in attendance may also, following the appointment of the insolvency administrator, elect a different insolvency administrator. The insolvency administrator is liable for damages to all parties for wrongful violation of his statutory duties. He is obliged to act in a prudent and conscientious manner. Types of Insolvency Proceedings Relating to Companies Under the German Insolvency Statute, the main insolvency proceedings relating to companies in Germany are: (i) liquidation (Liquidation); (ii) insolvency plan (Insolvenzplan); and (iii) selfmanagement (Eigenverwaltung). Liquidation results in a compulsory distribution of the company s assets. After the opening of the insolvency proceedings, the creditors assembly resolves either to liquidate the company or to continue its business. The liquidation procedure involves selling either the assets of the company, the entire company, or part of its business (übertragende Sanierung) in the interest of equal satisfaction of all creditors. The competent insolvency court (Insolvenzgericht) appoints the insolvency administrator (Insolvenzverwalter) who takes control of the company and collects, realises and distributes its assets. An alternative liquidation procedure is to establish an insolvency plan. The model for the insolvency plan was the Chapter 11 reorganisation plan under the U.S. Bankruptcy Code. This new legal structure offers the debtor, its shareholders and its creditors a legal instrument for mutually agreed management of the insolvency estate (Insolvenzmasse). Thus, the insolvency plan in the shape of a reorganisation, transfer, liquidation or other plan offers a comprehensive reorganisation procedure. Within a regulatory framework, i.e. preservation of the minority rights and compliance with certain procedural steps, the creditors may decide to reorganise, rescue or liquidate the insolvent company or may indeed choose a route lying somewhere between these alternatives. In standard insolvency proceedings, the insolvency administrator takes possession of the insolvency assets and is entitled to dispose of them. The management of the insolvent company is prohibited from processing and disposing of the insolvency assets at this stage. There is one exception to this rule, which is the self-management procedure (Eigenverwaltung) set out in the new German Insolvency Statute. This procedure was influenced by the U.S. model of a debtor in possession. In practice, since the introduction of these provisions in 1999, this procedure has proven unsatisfactory and is rarely used. Effect of Proceedings on Contracts and Claims According to the German Insolvency Statute, die insolvency administrator may, in certain circumstances, challenge legal acts which are detrimental to the creditors and were performed prior to the opening of insolvency proceedings. The relevant prerequisites depend on various conditions, for example the date on which the legal act was performed and whether or not the debtor was unable to make payment on that date and whether or not the creditor was aware of this situation. Especially legal acts performed during the three months before the petition of insolvency run the risk of being challenged. However, the relevant time frame may extend by up to ten years before filing of the 202

203 petition insofar as the legal act being challenged was performed with a conscious intent to cause harm and the creditor was aware of this or if collateral was provided for loans replacing equity capital. However, as a rule, the realisation of collateral is not contestable provided that the creation of the security was not detrimental to the remaining creditors. In addition, the commencement of insolvency proceedings has an effect on certain arrangements and obligations of the insolvent debtor. Certain contracts entered into by the debtor and actions of the debtor during this suspect period are automatically null and void. These include transactions to be performed at a certain time, financial futures transaction, mandates, agency agreements and powers of attorney. Also, the insolvency administrator has the right to decide whether or not to fulfill agreements which have not been completely fulfilled by the debtor and the other party. With respect to such mutual agreements that are not fulfilled, the other party may assert any claim arising from non-performance only as an insolvency creditor (Insolvenzgläubiger), subject to standard insolvency limitations. A lease agreement does not automatically terminate upon the commencement of insolvency proceedings involving either party to a lease agreement. The insolvency administrator is entitled to terminate any lease agreements entered into by the debtor as a tenant during the statutory termination notice period applicable to commercial and residential leases, as the case may be, irrespective of any contractual provisions. On the other hand, the landlord s termination right is restricted as he is not permitted to terminate the lease agreement either on the grounds of (i) failure to make rent payments prior to the submission of the petition commencing the insolvency proceedings (typically a payment default with two monthly rent instalments), or (ii) adverse developments in the debtor s financial circumstances after the petition has been filed for the commencement of the insolvency proceedings (Kündigungssperre). An explicit agreement between the parties granting a termination right for insolvency of a tenant is therefore deemed ineffective. On the other hand, the landlord is not prevented from terminating the lease agreement during the insolvency proceedings for other reasons. The landlord may not exercise any pre-existing statutory or contractual termination rights only in so far as they result from a (consecutive) payment default or an adverse development in the debtor s financial circumstances prior to the petition for insolvency proceedings. Any other termination right on the grounds of a non-contractual use of the leased premises are not affected by the termination ban and remain exercisable even alter filing of a petition for insolvency proceedings. Also, with respect to payment defaults, the landlord may terminate the lease agreement if the grounds for such termination re-emerge in me course of the insolvency proceedings. Rental or lease obligations incurred by an (interim) insolvency administrator to the extent that they constitute the assets administered by him, are privileged liabilities of the insolvency estate. The right to receive the privileged payments does not extend to (i) rental payments that were already outstanding before the petition was filed and (ii) rental obligations if and to the extent that the interim insolvency administrator does not use the property any longer. Such outstanding rent amounts would be treated as non-privileged claims like any other creditor s claims concerning the insolvent company. Unlike a material payment default, a further deterioration of the assets after the petition for the opening of the insolvency proceedings has been filed does not give the landlord the right to terminate the lease agreement. In the event that a debtor, as landlord of immovable property transferred for security purposes, prior to the commencement of the insolvency proceedings, assigns the right to receive rental payments, such assignment by way of a security assignment agreement is effective only to the extent that it relates to rental payments relating to the month during which the proceedings were commenced. If proceedings are commenced after the fifteenth day of the month, such transfer is also effective for the following calendar month. In such case, rents resulting from lettings of the property remain encumbered by a land charge and may be collected by way of a compulsory administration. 203

204 Effect of Insolvency on the Rights of Issuer Secured Creditors After the commencement of the insolvency proceedings, the nature of the realisation of the collateral and the question of who is entitled to effect realisation, depend on the nature of the collateral. For this purpose, security interest can be divided into the following categories: (i) security over immovable property, (ii) security over movable property which has been transferred for security purposes or for which there is another right of lien, (iii) assignments for security purposes, (iv) claims pledged by the debtor, and (v) other rights transferred as security. Immovable property can be realised by the administrator in insolvency by way of a private sale or by way of a compulsory sale or through receivership. In addition, a secured creditor is entitled to request a compulsory sale or receivership of such property. The secured creditor must hold an executable title against the debtor, as is the case outside the insolvency proceedings. If a secured creditor initiates debt enforcement, then in certain circumstances the administrator in insolvency is entitled to request temporary suspension of the compulsory sale or receivership, if such realisation would significantly impede meaningful use of the property for the benefit of the insolvent s estate. The realisation of movable property which is pledged or subject to other right of lien or which has been transferred as security is the responsibility of the administrator in insolvency, provided he is in possession of the property. In that case the administrator in insolvency may effect the realisation through a private sale, debt enforcement or the sale of a pledge. Claims assigned by the debtor as security are collected by the administrator in insolvency or otherwise realised, for example through a sale or assignment Claims pledged by the debtor in insolvency may be realised by issuer secured creditors themselves in accordance with the general provisions, unless otherwise agreed, on the basis of an executable title by way of debt enforcement. A disputed issue is the authority to realise other rights transferred as security. The law does not stipulate expressly whether the administrator in insolvency or the creditor of the security is entitled to effect realisation. The issue has not yet been decided by the German Federal Court of Justice (Bundesgerichtshof). The meaning and purpose of the provision on the realisation of security interests set forth in the German Insolvency Statute indicate, however, that the administrator in insolvency is entitled to effect realisation (including through a private sale). Ability of Insolvency Administrator to Suspend Enforcement Even though a creditor is entitled to separate enforcement following the opening of insolvency proceedings, the insolvency administrator may in certain circumstances request a temporary suspension of the enforcement of a land charge. In case of a compulsory sale, the reasons are as follows: (i) the insolvency administrator has not yet reported to the creditor s assembly in relation to the continuation of the insolvency proceedings (the reason being that the insolvency administrator should have the possibility to maintain the property as an asset of the insolvency estate so that the creditor s assembly may decide on the property); (ii) the property is needed for the continuation of the business or for the preparation of the sale of the business; (iii) the compulsory sale would jeopardise an insolvency plan which has been proposed by the insolvency administrator; or (iv) the compulsory sale would hinder an appropriate liquidation of the insolvency estate. For the decision to sustain or to reject the insolvency administrator s application, the court would consider the interests of the insolvency creditors, the benefit of having an undisturbed continuation of the business and the insolvency plan. It would not consider the interest of the debtor in such a decision. In any event, taking into consideration the creditor s financial condition, such application would be rejected by the court responsible for the enforcement of the property if a temporary suspension would not be in the interests of the creditor. Furthermore, such request would only be accepted if, inter alia, ongoing interest payments or other creditor compensation for any losses in relation the property value are ensured during the time of suspension of the enforcement proceedings. The enforcing creditor must request continuation of such enforcement proceedings within six months after the date of suspension, otherwise the enforcement proceedings will be terminated by the court. In case of a compulsory administration, the insolvency administrator may require temporary suspension of the enforcement of the land charge if it can provide prima facie evidence that the 204

205 continuation of the compulsory administration would considerably hinder the use of the insolvency estate. The insolvency administrator, however, must ensure that the enforcing creditor s losses arising out of the suspension of the compulsory administration are compensated by ongoing payments to the enforcing creditor from the insolvency estate. Out-of-Court Composition and Settlement In the framework of insolvency proceedings German law also allows for out-of-court settlement or liquidation (aussergerichtlicher Vergleich or Liquidation). Out-of-court settlement or liquidations are relatively common in practice. An out-of-court settlement can be arranged as a reorganisation or a liquidation on agreement amongst the debtor, its shareholder and its creditors. This voluntary procedure will be successful only if no creditor files a petition for insolvency proceedings. However, if an insolvency court has denied a petition for the opening of insolvency proceedings as a result of insufficient assets (Abweisung mangels Masse), settlement or liquidation are the only alternatives. Prior to the opening of insolvency proceedings out-of-court settlements between the creditor and the debtor are possible at any time. If negotiated and concluded by attorneys an behalf of the parties an out-of-court settlement may be declared as immediately enforceable by the local court which would be responsible for its enforcement Moreover, every out-of-court settlement may be declared as immediately enforceable by a notary public with business address in the district of the local court responsible for its enforcement. Such declarations of enforceability are executory titles regarding the out-of-court settlement which are necessary for immediate enforcement. The local court and the notary public in charge respectively will issue the declaration of immediate enforceability upon application by one party (i) if the debtor submits himself expressly to immediate enforcement in the application and (ii) if the settlement document will be deposited in escrow at the local court/notary public. The court or the notary public, as the case may be, will reject the application if the settlement agreement is not valid and binding. A settlement is, in particular, not valid and binding if the parties are mistaken about the factual circumstances of the settled dispute. Costs Related to Insolvency Within the context of insolvency proceedings, so-called cost contributions of the security creditors are incurred where the insolvency administrator is entitled to realise the security collateral. Where movable property is involved, a flat-rate fee of 4 per cent is charged for assessment of the security collateral and 5 per cent, for the realisation. However, if the costs of the realisation are significantly higher or lower than the 5 per cent threshold, then the actual costs incurred have to be taken into account. In addition, any VAT payable is also charged. Frequently, the insolvency administrator and the creditors of the security will agree on the cost contribution payable to the insolvent s estate. As regards the realisation of immovable property, the costs depend on the kind of realisation involved. Where the administrator in insolvency realises through a private sale, then as a rule he will agree with the creditors on a cost contribution that is considerably lower than 9 per cent. In case of realisation through a compulsory sale or receivership, the costs are payable in accordance with the statutory provisions. 205

206 CERTAIN MATTERS OF DUTCH LAW Pursuant to Council Regulation (EC) No. 1346/2000 of 29 May 2000 on Insolvency Procedures (the Regulation), the courts of the Member State within the territory of which the centre of a debtor s main interests is situated shall have jurisdiction to open insolvency proceedings. The Regulation contains a rebuttable presumption that the centre of main interests of a company is the place of its registered office. The courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if it possesses an establishment within that territory, and the effects of those proceedings shall be limited to the assets of the debtor situated in the territory of that Member State only. From a German legal perspective, the Borrower is said to have its seat in the Netherlands. Also, the Borrower has its offices in the Netherlands. On this basis, it is likely that on the basis of art. 3 of the Regulation, the Dutch courts would find to have jurisdiction to open main insolvency proceedings in respect of the Borrower. The insolvency proceedings available would be either moratorium (surseance van betaling) or bankruptcy (faillissement). Either procedure involves the appointment by the court of an insolvency practitioner. Upon the opening of the proceedings the Borrower would no longer be able to perform legal acts. In the case of moratroium, the Borrower would be represented by management in conjunction with the court appointed administrator, in the case of bankruptcy the liquidator would have exclusive authority to represent the Borrower and act on its behalf. The law applicable to the insolvency proceedings and their effects shall, pursuant to the Regulation, in principle be that of the Member State within the territory of which such proceedings are opened, which would be Dutch insolvency law. Moratorium is designed to enable the insolvent party to restructure and continue its business. It does not apply to claims to the extent they have the benefit of collateral security. Bankruptcy is aimed at liquidating the assets of the insolvent party for the benefit of its creditors, who will receive payment in accordance with their ranking. Secured creditors are entitled to continue to enforce collateral security as if there was no bankruptcy, but subject to specific remedies granted to a liquidator under Dutch insolvency law. An important thing to note is, that it follows from article 5 of the Regulation, assets located in Germany and subject to German security interests are not affected by a formal insolvency proceeding opened in the Netherlands. As a consequence, the Security Trustee would be able to continue to exercise its security rights under collateral security, notwithstanding the insolvency proceedings opened in the Netherlands. Also, any of the rights and remedies available to a Dutch liquidator would not apply in respect of claims secured by collateral security over assets outside the Netherlands. 206

207 USE OF PROCEEDS The net proceeds from the issue of the Notes will be approximately A1,192,021,267 and this sum will be applied by the Issuer towards payment to the Originator of the consideration in respect of the Loan to be purchased on the Issue Date pursuant to the Loan Sale Agreement. See The Transaction Documents the Loan Sale Agreement and Retained Interest Holder Intercreditor Agreement Loan Sale Agreement. 207

208 FEES AND EXPENSES The estimated cost of the application for admission to the Official List and admission to trading on the Irish Stock Exchange s regulated market for listed securities is approximately A5,

209 IRISH TAXATION The following is a summary based on the laws and practices currently in force in Ireland regarding the tax position of investors beneficially owning their Notes as an investment and should be treated with appropriate caution. Particular rules may apply to certain classes of taxpayers holding Notes, including dealers in securities, trustees, etc. The summary does not constitute tax or legal advice and the comments below are of a general nature only. Prospective investors in the Notes should consult their professional advisors on the tax implications of the purchase, holding, redemption or sale of the Notes and the receipt of interest thereon under the laws of their country of residence, citizenship or domicile. Withholding Tax In general, tax at the standard rate of income tax (currently 20 per cent), is required to be withheld from payments of Irish source interest which would include interest on the Notes. An exemption from withholding on interest payments exists for certain securities (quoted Eurobonds) issued by a company (such as the Issuer) which carry a right to interest and are quoted on a recognised stock exchange (which would include the Irish Stock Exchange). Any interest paid on such quoted Eurobonds can be paid free of withholding tax provided: (a) the person by or through whom the payment is made is not in Ireland; or (b) the payment is made by or through a person in Ireland, and either: (i) the quoted Eurobond is held in a clearing system recognised by the Irish Revenue Commissioners (Euroclear and Clearstream, Luxembourg are so recognised), or (ii) the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the interest is not resident in Ireland and has made a declaration to a relevant person (such as an Irish paying agent) in the prescribed form. So long as the Notes are quoted on a recognised stock exchange and are held in Euroclear and/or Clearstream, Luxembourg, interest on the Notes can be paid by the Issuer and any paying agent acting on behalf of the Issuer without any withholding or deduction for or on account of Irish income tax. If, for any reason, the quoted Eurobond exemption referred to above does not or ceases to apply, the Issuer can still pay interest on the Notes free of withholding tax provided it is a qualifying company (as defined in Section 110 of the Taxes Consolidation Act 1997 of Ireland) and provided the interest is paid to a person resident in a relevant territory (i.e. a Member State of the European Union (other than Ireland) or in a country with which Ireland has a double taxation agreement). For this purpose, residence is determined by reference to the law of the country in which the recipient claims to be resident. This exemption from withholding tax will not apply, however, if the interest is paid to a company in connection with a trade or business carried on by it through a branch or agency located in Ireland. The Issuer must be satisfied that the terms of the exception are satisfied. In certain circumstances, Irish tax will be required to be withheld at the standard rate from interest on any quoted Eurobond, where such interest is collected by a bank in Ireland on behalf of any Noteholder who is Irish resident. Encashment Tax In certain circumstances, Irish tax will be required to be withheld at the standard rate of income tax (currently 20 per cent.) from interest on any Note, where such interest is collected or realised by a bank or encashment agent in Ireland on behalf of any Noteholder. Encashment tax does not apply where the Noteholder is not resident in Ireland and has made a declaration in the prescribed form to the encashment agent or bank. Taxation of Noteholders Notwithstanding that a Noteholder may receive interest on the Notes free of withholding tax, the Noteholder may still be liable to pay Irish income tax. Interest paid on the Notes may have an Irish 209

210 source and therefore be within the charge to Irish income tax and levies. Ireland operates a self assessment system in respect of income tax and any person, including a person who is neither resident nor ordinarily resident in Ireland, with Irish source income can come within its scope. There is an exemption from Irish tax on interest payments made by a company in the ordinary course of its trade or business provided the recipient of the interest is not resident in Ireland and is a company resident in a Member State of the European Union (other than Ireland) or in a country with which Ireland has a double tax treaty and provided it does not carry on a trade in Ireland through a branch or agency in Ireland. In addition, any interest which can be paid free of withholding tax under the quoted Eurobond exemption is exempt from tax where the payment is made to a person not resident in Ireland and resident in a Member State of the European Union (other than Ireland) or in a country with which Ireland has a double taxation treaty. For these purposes, residence is determined under the terms of the relevant double taxation agreement or, in any other case, the law of the country in which the recipient claims to be resident. Notwithstanding these exemptions from income tax, a corporate recipient that carries on a trade in Ireland through a branch or agency in respect of which the Notes are held or attributed, may have a liability to Irish corporation tax on the interest. Interest on the Notes which does not fall within the above exemptions may be within the charge to Irish income tax. It is understood that the Irish Revenue Commissioners have, in the past, operated a practice not to take any action to pursue any liability to such tax in respect of persons who are not regarded as being resident in Ireland except where such persons have a taxable presence of some sort in Ireland or seek to claim any relief or repayment in respect of Irish tax. There can be no assurance that the Irish Revenue Commissioners will apply this practice in the case of any Noteholder. Capital Gains Tax A holder of Notes will be subject to Irish tax on capital gains on a disposal of Notes unless such holder is neither resident nor ordinarily resident in Ireland and does not carry on a trade in Ireland through a branch or agency in respect of which the Notes are used or held. Capital Acquisitions Tax A gift or inheritance comprising of Notes will be within the charge to capital acquisitions tax (which subject to available exemptions and reliefs, is currently levied at 20 per cent.) if either (i) the disponer or the donee/successor in relation to the gift or inheritance is resident or ordinarily resident in Ireland (or, in certain circumstances, if the disponer is domiciled in Ireland irrespective of his residence or that of the donee/successor) on the relevant date or (ii) if the Notes are regarded as property situate in Ireland (i.e. if the Notes are physically located in Ireland or if the register of the Notes is maintained in Ireland). Stamp Duty No stamp duty or similar tax is imposed in Ireland on the issue (on the basis of an exemption provided for in Section 85(2)(c) to the Stamp Duties Consolidation Act 1999 provided the money raised on the issue of the Notes is used in the course of the Issuer s business), transfer or redemption of the Notes whether they are represented by Global Notes or Definitive Notes. 210

211 GERMAN TAXATION The following is a general discussion of certain German tax consequences of the acquisition, ownership and disposition of the Notes. It does not purport to be a comprehensive description of all tax considerations which may be relevant to a decision to purchase Notes, and, in particular, does not consider any specific facts or circumstances that may apply to a particular purchaser of Notes. This summary is based on the laws of Germany currently in force and as applied on the date of this Prospectus, which are subject to change, possibly with retroactive or retrospective effect. Prospective purchasers of the Notes are advised to consult their own tax advisors as to the tax consequences of the purchase, ownership and disposition of the Notes, including the effect of any state or local taxes, under the tax laws of Germany and each country of which they are residents. Tax Residents Income and Trade Tax Payments of interest on the Notes, including interest having accrued up to the disposition of a Note and credited separately (Accrued Interest), if any, to Noteholders who are tax residents of Germany (i.e., persons whose residence, habitual abode, statutory seat or place of effective management and control is located in Germany) are subject to German personal or corporate income tax (plus solidarity surcharge (Solidaritätszuschlag) at a rate of 5.5 per cent. thereon). Such interest may also be subject to trade tax if the Notes form part of the property of a German trade or business. Accrued Interest paid upon the acquisition of a Note may give rise to negative income if the Note is held as a non-business asset. Upon the disposition, assignment or redemption of a Note a holder holding the Note as a nonbusiness asset will have to include in his taxable income further amounts if the instrument can be classified as a financial innovation (Finanzinnovation) under German tax law. In this case, generally the difference between the proceeds from the disposition, assignment or redemption and the issue or purchase price is deemed to constitute interest income subject to income tax (plus solidarity surcharge at a rate of 5.5 per cent. thereon) in the year of the disposition, assignment or maturity of the Note. Alternatively, the Noteholder may show that such difference exceeds the difference between the redemption amount and the issue price of the Note to the extent attributable to the period over which he has held such Note. In this case only the lower pro-rated initial yield to maturity, if such amount is fixed at the time of issue, minus interest (including Accrued Interest) already taken into account, is taxed as interest income. Where a Note forms part of the property of a German trade or business, each year the part of the difference between the issue or purchase price of the Note and its redemption amount (if such amount is fixed at the time of the acquisition) attributable to such year as well as interest accrued must be taken into account as interest income and may also be subject to trade tax. Capital gains from the disposition of Notes, other than income described in the second paragraph above, are only taxable to a German tax-resident individual if the Notes are disposed of within one year after their acquisition or form part of the property of a German trade or business, in which case the capital gains may also be subject to trade tax. Capital gains derived by German-resident corporate holders of Notes will be subject to corporate income tax (plus solidarity surcharge at a rate of 5.5 per cent. thereon) and trade tax. Withholding Tax If Notes are held in a custodial account which the Noteholder maintains with a German branch of a German or non-german bank or financial services institution (the Disbursing Agent) a 30 per cent. withholding tax on interest payments (Zinsabschlag) (plus solidarity surcharge at a rate of 5.5 per cent. thereon) will be levied, resulting in a total tax charge of per cent. of the gross interest payment. Withholding tax on interest is also imposed on Accrued Interest. If Notes are physically presented at the office of a Disbursing Agent (an over-the-counter transaction (Tafelgeschäft)) withholding tax will be deducted at a rate of 35 per cent. (plus solidarity surcharge at a rate of 5.5 per cent. thereon)) of the gross amount of interest paid. 211

212 In addition, if Notes qualify as financial innovations and are kept in a custodial account which the Noteholder maintains with a Disbursing Agent such custodian will generally withhold tax at a rate of 30 per cent. (plus solidarity surcharge at a rate of 5.5 per cent. thereon) from the positive difference between the redemption amount or proceeds from the disposition or assignment and the issue or purchase price of the Notes if the Notes have been kept in a custodial account with such Disbursing Agent since the time of issuance or any acquisition by the Noteholder, respectively. If the Notes have not been kept in a custodial account with a Disbursing Agent since the time of issuance of any acquisition, withholding tax of 30 per cent. (plus solidarity surcharge at a rate of 5.5 per cent. thereon) is applied to 30 per cent. of the amounts paid in partial or final redemption or the proceeds from the disposition or assignment of the Notes, respectively. In the case of over-the-counter transactions, withholding tax will be levied at a rate of 35 per cent. (plus solidarity surcharge at a rate of 5.5 per cent. thereon) of the gross amount of interest paid. In computing the tax to be withheld, the Disbursing Agent may deduct from the basis of the withholding tax any Accrued Interest previously paid during the same calendar year by the Noteholder to the Disbursing Agent. In general, no withholding tax will be levied if the Noteholder is an individual: (i) whose Note does not form part of the property of a German trade or business or give rise to income from the letting and leasing of property; and (ii) who filed a withholding exemption certificate (Freistellungsauftrag) with the Disbursing Agent, but only to the extent the interest income derived from the Note together with other investment income does not exceed the maximum exemption amount shown on the withholding exemption certificate. Similarly, no withholding tax will be deducted if the Noteholder has submitted to the Disbursing Agent a certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the relevant local tax office. In case of over-the-counter transaction proceeds from the disposition, assignment or redemption of a Coupon, and if the Notes qualify as financial innovations 30 per cent. of the proceeds from the disposition, assignment or redemption of a Note, will also be subject to withholding tax at a rate of 35 per cent. Where the 35 per cent. withholding tax applies Accrued Interest paid cannot be taken into account in determining the withholding tax base. Again a solidarity surcharge at a rate of 5.5 per cent. of the withholding tax applies so that the total tax burden to be withheld is per cent. Withholding tax and the solidarity surcharge thereon are credited as prepayments against the German personal or corporate income tax and the solidarity surcharge liability of the German resident. Excessive amounts withheld will entitle the Noteholder to a refund, based on an assessment to tax. Please note that the German Federal Government is currently (September 2006) considering plans to make withholding tax on interest income a definitive tax change. Non-residents Income and Trade Tax Interest, including Accrued Interest and proceeds from the disposition, assignment or redemption of a Note, are not subject to German taxation, unless: (a) the Notes form part of the business property of a permanent establishment, including a permanent representative, or a fixed base maintained in Germany by the Noteholder; or (b) the interest income otherwise constitutes German-source income (such as income from the letting and leasing of certain German-situs property). In cases (a) and (b) a tax regime similar to that explained above under Tax Residents applies. Capital gains from the disposition of Notes other than proceeds from their sale or redemption recharacterised as interest income for German tax purposes (as explained above under Tax Residents ) are, however, only taxable in the case of (a) above. Withholding Tax Non-residents of Germany are, in general, exempt from German withholding tax on interest and the solidarity surcharge thereon. However, where the interest is subject to German taxation as set forth in the preceding paragraph and Notes are held in a custodial account with a Disbursing Agent or in over-the-counter transactions, withholding tax is levied as explained above under Tax Residents. Where Notes are not kept in a custodial account with a Disbursing Agent and interest or proceeds from the disposition, assignment or redemption of a Note are paid by a Disbursing Agent to a non- 212

213 resident, withholding tax of 35 per cent. will apply as explained above under Tax Residents. The withholding tax may be refunded based on assessment to tax or under an applicable tax treaty. Inheritance and Gift Tax No inheritance or gift taxes with respect to any Note will arise under the laws of Germany, if, in the case of inheritance tax, neither the descendent nor the beneficiary, or, in the case of gift tax, neither the donor nor the donee, is a resident of Germany and such Note is not attributable to a German trade or business for which a permanent establishment is maintained or a permanent representative has been appointed in Germany. Exceptions from this rule apply to certain German expatriates. Other Taxes No stamp, issue, registration or similar taxes or duties will be payable in Germany in connection with the issuance, delivery or execution of the Notes. Currently, net assets tax is not levied in Germany. EU Savings Tax Directive Under EC Council Directive 2003/48/EC on the taxation of savings income (the Directive), Member States are required, from 1 July 2005, to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-eu countries and territories including Switzerland have agreed to adopt similar measures (a withholding system in the case of Switzerland) with effect from the same date. By legislative regulations dated 26 January 2004 the Federal Government of Germany enacted provisions implementing the Directive into German law. These provisions apply from 1 July Noteholders who are individuals should note that the Issuer will not pay additional amounts under Condition 8 of the Terms and Conditions of the Notes in respect of any withholding tax imposed as a result of the Directive. 213

214 SUBSCRIPTION AND SALE Goldman Sachs International and Lehmen Brothers International (Europe) (together the Managers) have agreed, pursuant to a subscription agreement dated on or about 19 October 2006 (the Subscription Agreement), between the Managers and the Issuer, subject to certain conditions, to subscribe and pay for the Class A Notes at the issue price of 100 per cent. of their initial principal amount, the Class B Notes at the issue price of 100 per cent. of their initial principal amount, the Class C Notes at the issue price of 100 per cent. of their initial principal amount and the Class D Notes at the issue price of 100 per cent. of their initial principal amount. The Issuer has agreed to reimburse the Managers for certain of its expenses in connection with the issue of the Notes. The Subscription Agreement is subject to a number of conditions and may be terminated by the Managers in certain circumstances prior to payment to the Issuer. The Issuer has agreed to indemnify the Managers against certain liabilities in connection with the offer and sale of the Notes. United States of America Each of the Managers has represented and agreed with the Issuer that the Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act), or any state securities laws, and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation 5 under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Notes are being offered and sold outside the United States to persons other than U.S. persons (as defined in Regulation S under the Securities Act). Each of the Managers has agreed that, except as permitted by the Subscription Agreement, it will not offer or sell the Notes (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Notes and the Issue Date (for the purposes only of this section Subscription and Sale, the Distribution Compliance Period) within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Securities Act and that it will send to each affiliate, distributor, dealer or other person to which it sells Notes during the Distribution Compliance Period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons. In addition, until 40 days after the commencement of the offering of the Notes, an offer or sale of the Notes within the United States by a dealer, whether or not participating in the offering, may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an available exemption from registration under the Securities Act. The Notes are in bearer form and are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a U.S. person, except in certain transactions permitted by U.S. tax regulations. Terms used in the preceding sentence have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder. United Kingdom Each of the Managers has represented and agreed that: (a) (b) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (FSMA), with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom; and it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer. 214

215 Japan The Notes have not been and will not be registered under the Securities and Exchange Law. Each of the Managers has represented and agreed that it has not offered or sold and will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan. Ireland Each of th Managers has agreed that: (a) (b) (c) it will not underwrite the issue of, or place the Notes, otherwise than in conformity than with the provisions of the Irish Investment Intermediaries Act 1995 (as amended), including, without limitation, Sections 9 and 23 thereof and any codes of conduct rules made under Section 37 thereof and the provisions of the Investor Compensation Act 1998; it will not underwrite the issue of, or place, the Notes, otherwise than in conformity with the provisions of the Irish Central Bank Acts (as amended) and any codes of conduct rules made under Section 117(1) thereof; and it will not underwrite the issue of, place or otherwise act in Ireland in respect of the Notes, otherwise than in conformity with the provisions of the Irish Market Abuse (Directive 2003/6/ EC) Regulations 2005 and any rules issued by IFSRA pursuant thereto. France Each of the Managers and the Issuer has represented and agreed that it has not offered or sold and will not offer or sell, directly or indirectly, Notes to the public in France, and has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, the Prospectus or any other offering material relating to the Notes, and that such offers, sales and distributions have been and will be made in France only to (a) providers of investment services relating to portfolio management for the account of third parties, and/or (b) qualified investors (investisseurs qualifiés) other than individuals, all as defined in, and in accordance with, articles L.411-1, L and D of the French Code monétaire et financier. This Prospectus prepared in connection with the Notes has not been submitted to the clearance procedures of the Autorité des marches financiers. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each of the Managers has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of Notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State at any time: (a) (b) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than A43,000,000 and (3) an annual net turnover of more than A50,000,000, as shown in its last annual or consolidated accounts; or 215

216 (c) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an offer of Notes to the public in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member States and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. General Other than the approval by the Financial Regulator in Ireland of this document as a prospectus in accordance with the requirements of the Prospectus Directive and relevant implementing measures in Ireland, no action is being taken in any jurisdiction that would or is intended to permit a public offering of the Notes, or the possession, circulation or distribution of this Prospectus or any other material relating to the Issuer or the Notes in any jurisdiction where action for that purpose is required. This Prospectus does not constitute, and may not be used for the purpose of, an offer or solicitation in or from any jurisdiction where such an offer or solicitation is not authorised. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Prospectus nor any other offering material or advertisement in connection with the Notes may be distributed or published in or from any country or jurisdiction, except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. Each of the Managers has undertaken not to offer or sell any of the Notes, or to distribute this document or any other material relating to the Notes, in or from any jurisdiction except under circumstances that will result in compliance with applicable law and regulations. 216

217 GENERAL INFORMATION 1. The issue of the Notes was authorised by resolution of the Board of Directors of the Issuer passed on or about 17 October It is expected that listing of the Notes on the Official List of the Irish Stock Exchange will be granted on or about the Issue Date, subject only to the issue of the Global Notes. The listing of the Notes will be cancelled if the Global Notes are not issued. Transactions will normally be effected for settlement in euro and for delivery on the third working day after the day of the transaction. The Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg as follows: CLASS COMMON CODE ISIN Class A XS Class B XS Class C XS Class D XS No statutory or non-statutory accounts in respect of any financial year of the Issuer have been prepared. For so long as the Notes are listed on the Official List of the Irish Stock Exchange, the most recently published audited annual accounts of the Issuer from time to time will be available at the specified office of the Irish Paying Agent. The Issuer does not publish interim accounts. 4. The Issuer is not, and has not been, involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) which may have, or have had, since the date of its incorporation, a significant effect on the Issuer s financial position or profitability. 5. The Issuer has not, since the date of its incorporation, entered into any material contracts or arrangements other than those disclosed in this Prospectus. 6. Save as disclosed in this Prospectus, since the date of its incorporation, the Issuer has not commenced operations, no accounts have been made up and there has been no material adverse change in the financial position or prospects of the Issuer and no significant change in the trading or financial position of the Issuer. 7. Copies of the following documents may be physically inspected during usual business hours on any week day (excluding Saturdays, Sundays, and public holidays) at the registered office of the Issuer for so long as the Notes are listed on the Irish Stock Exchange from the date of this document: (a) the memorandum and articles of association of the Issuer; and (b) the following documents (together, the Transaction Documents): (i) the Note Trust Deed; (ii) the Loan Sale Agreement; (iii) the Issuer Deed of Charge and Assignment; (iv) the German Security Assignment Agreement; (v) the Share Declaration of Trust; (vi) the Servicing Agreement; (vii) the Cash Management and Issuer Account Bank Agreement; (viii) the Corporate Services Agreement; (ix) the Liquidity Facility Agreement; (x) the Basis Swap Agreement; (xi) the Agency Agreement; 217

218 (xii) the Master Definitions and Construction Schedule; and (xiii) The Issuer-ICSD Agreement. 8. The Issuer does not intend to produce any post-issuance reporting on the performance of the Notes or the Loan Sale Agreement. 9. The Cash Manager has agreed to deliver to the Issuer, the Issuer Security Trustee, the Servicer, the Special Servicer, the Noteholders and the Rating Agencies, a Statement to Noteholders in respect of each Payment Date in which it will notify the recipients of, among other things, all amounts received in the Transaction Account and payments made with respect thereto. Each Statement to Noteholders will be made available to Noteholders and certain other persons on a quarterly basis via the Cash Manager s internet website currently located at however such website does not form part of the information provided for the purposes of this Prospectus. 10. The Valuer has given, and has not withdrawn, its written consent to the issue of this Prospectus and the inclusion of references to its name in the form and context in which it is included. It has authorised the contents of this Prospectus for the purposes of section 45 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 (Ireland). 11. The Note Trust Deed and the Issuer Deed of Charge and Assignment will provide that the Note Trustee may rely on reports or other information for professional advisors or other experts (whether addressed to or attained by the Issuer, the Note Trustee or any other person) in accordance with the provisions of the Note Trust Deed and the Issuer Deed of Charge and Assignment, whether or not such report or other information or engagement letter or other document entered into by the Note Trustee and the relevant person in connection thereto, contains any monetary or other unit as the liability of the relevant professional advisor or expert. 12. Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for the Issuer in connection with the Notes and is not itself seeking admission of the Notes to the official list of the Irish Stock Exchange or to trading on the Irish Stock Exchange for the purposes of the Prospectus Directive. 218

219 APPENDIX 1 BORROWER INFORMATION The Borrower and its Partners The Loan is made to Highstreet B Portfolio GbR (Gesellschaft bürgerlichen Rechts (GbR)), a civil law partnership established under the laws of Germany (the Borrower). The Borrower is a special purpose entity whose business consists primarily of holding and managing the Properties in which such Borrower holds an interest, for its own account or for the account of third parties. The Borrower has represented in the Senior Facility Agreement that it has not traded or carried on any business since the date of its incorporation except for the development, ownership and management of the Properties in which it has an interest. The Borrower was constituted pursuant to a partnership agreement (Gesellschaftsvertrag) dated 26 March 2006 (the PartnershipAgreement). Civil law partnerships are not registered under German law. The Borrower does not have any employees. There are two partners in the Borrower: (1) Highstreet Holding GbR, a civil law partnership of the Equity Holders established under the laws of Germany; and (2) W2005/SixBV, a private company with limited liability incorporated in the Netherlands. Both partners are special purpose entities and have no employees. W2005/SixBV is indirectly owned in part by subsidiaries of GSI. Highstreet Holding GbR holds a 100 per cent. participation in the assets of the Borrower. The partners of the Highstreet Holding GbR are KQ Joint Venture GmbH & Co. KG, W2005/Thirty-Three B.V. and W2005/Six B.V. The shareholders in W2005/Six B.V. are W2005/Thirty-Three B.V. and KQ Joint Venture GmbH & Co. KG. For further structure information, please refer to the structure diagram set out below in Corporate Structure of the Borrower Group. Pursuant to the partnership agreement (Gesellschaftsvertrag) Highstreet Holding GbR is entitled to manage and represent the Borrower. The rights of the partners in the Borrower are contained in the partnership agreement (Gesellschaftsvertrag) and the Borrower will be managed in accordance with this partnership agreement and with the provisions of German law. As of the date of this Prospectus no financial statements in respect of the Borrower have been produced. Insofar as the Issuer is aware, the Borrower is not, and has not been, involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Borrower is aware), which may have, or have had since its establishment, a significant effect on the Borrower s financial position or profitability. A copy of the partnership agreement (Gesellschaftsvertrag) of the Borrower may be physically inspected during usual business hours on any week day (excluding Saturdays, Sundays and public holidays) at the registered office of the Issuer for the life of this Prospectus. Borrower Borrower s Registration No. Borrower s Registered Seat Borrower s Partners Highstreet B Portfolio GbR N/A Strawinskylaan 1207, 1077 XX Amsterdam, The Netherlands Tel.: Highstreet Holding GbR, Strawinskylaan 1207, 1077 XX Amsterdam, The Netherlands W2005/Six BV, Strawinskylaan 1207, 1077 XX Amsterdam, The Netherlands The Partnership Agreement (Gesellschaftsvertrag) The partnership agreement (Gesellschaftsvertrag) dated 26 March 2006 in respect of the Borrower (the Partnership Agreement) was entered into between Highstreet Holding GbR and W2005/Six BV (who are each partners). It provides that each of the partners participates partnership assets as follows: (a) Highstreet Holding GbR with a participation of 100%; and 219

220 (b) W2005/Six BV with a participation of 0%. The purpose of the Borrower is the acquisition, maintenance, management and disposal of the real properties and hereditary building rights specified in an annexure to the partnership agreement of Highstreet Holding GbR (the Highstreet Holding Partnership Agreement) (which includes the Properties). The domicile of the Borrower and the location of its management shall be in Amsterdam, The Netherlands. Highstreet Holding GbR is entitled to manage and represent the Borrower, and its actions in this regard shall be taken by two of its legal representatives having joint power of representation. Pursuant to the Highstreet Holding Partnership Agreement, W2005/Thirty-Three BV has the power to manage and represent Highstreet Holding GbR. Highstreet Holding GbR shall be responsible for directing the ordinary day-to-day business of the Borrower, including as regards the management and disposal of the Properties, in accordance with targets specified in relevant business plans, the annual budget and duties assigned to it under the Partnership Agreement. The Borrower also has an advisory board (Beirat) consisting of four members (with each partner having the right to appoint two of those members. The duties and powers of the advisory board are set out in the Partnership Agreement. The partnership shall terminate upon the expiration of the year in which all of the properties specified in the annexure to the Highstreet Holding Partnership Agreement have been disposed of by the partnership, Highstreet Holding GbR or any other subsidiary of Highstreet Holding GbR. Apart from this automatic termination provision, the Partnership Agreement provides that the partners may only terminate the partnership for good cause. It states that good cause may exist in particular if a partner breaches material provisions of the Partnership Agreement or otherwise causes serious and lasting damage to the interests of the partnership (although the partner wishing to asset such termination right must give the other partner one month warning and the opportunity to remedy the situation). Any partner not responsible for the termination or other dissolution of the partnership may demand that the partnership s business operations be continued (this shall all be the case in the event of a withdrawal of a party due to insolvency) 220

221 Corporate Structure of the Borrower Group The following diagram sets out the organisational structure of the Borrower group on the Issue Date. Whitehall Street Global Real Estate Limited Partnership 2005 Whitehall Street International Real Estate Limited Partnership 2005 Whitehall Street Global Employee Fund 2005 L.P. Whitehall Street International Employee Fund 2005 (Delaware), L.P % % % Shares Loan Whitehall European RE 1 Sàrl % Whitehall European RE 2 Sàrl % % Whitehall European RE 3 Sàrl Karstadt Immobilien AG & Co. KG W2005/Thirty-Two B.V. 100% 100% KQ Joint Venture GmbH & Co. KG W2005/Thirty-Three B.V. 49% 51% W2005/Six B.V. 49% 51% Highstreet Holding GbR 0% 100% 0% 0% Highstreet A Portfolio Gbr Lease Highstreet B Portfolio GbR (Borrower) Lease 49% 51% W2005/Seven B.V. Sublease Sublease Karstadt Warenhaus GmbH Quelle GmbH Transfer of the Properties to the Borrower Pursuant to the Real Property Purchase Agreement (Grundstückskaufvertrag) dated on or about 27 March 2006 and as amended on 30 June 2006 and on 20 July 2006 (the Real Property Purchase Agreement) the Borrower agreed to purchase the Properties from Affiliates of KarstadtQuelle AG. Highstreet A also acquired other properties used in the business of KarstadtQuelle AG and its Affiliates under the Real Property Purchase Agreement. The principal terms of the Acquisition Agreement are set out below: Conditions Precedent The conditions precedent listed in the Real Property Purchase Agreement are as follows: (a) that priority notices have been recorded for the benefit of the Borrower in the land registers with respect to the relevant Properties, and only encumbrances assumed by the Borrower and registered in the land registers with the Borrower s approval are ranking before such priority notices, or the officiating notary confirms that there is no impediment-excepting payment of the land register costs to the 221

222 registration of the priority notices with the correct priority; (b) that the officiating notary holds (i) the necessary documents for the cancellation of the encumbrances in Divisions II and III of the land register that the Borrower does not assume, or (ii) with respect to the land charges assumed in rem by the Borrower, the approval of Karstadt Hypothekenbank AG together with its declaration that it is entitled to the land charges and its prior collateral and realisation agreements with the relevant seller are no longer in effect (declaration of non-valuation) and that it assigns to the Borrower or to a financial institution designated by the Borrower the lower-priority land charge components which are not needed as collateral under the financing agreement newly agreed with the Borrower (documents (i) and (ii) each in executable form and either free of conditions or with conditions that can be fulfilled by the purchase price); the final redemption amounts must be specified no later than one London banking day before the purchase price becomes due; and (c) that the officiating notary has in his possession the official permits necessary for the validity and implementation of the Real Property Purchase Agreement and/or negative certifications in particular in accordance with 24 et seq. of the German Planning Code (BauGB)-with the exception of the clearance certificate of the tax office-the necessary statements of acceptance of the respective owners of the properties subject to hereditary building rights for the transfer of the hereditary building rights and their encumbrance with mortgages for financing purposes in the amounts permitted, as well as their statement of abstention from exercising any rights of first refusal that may have been agreed in the agreements on hereditary building rights, the required official permits concerning the Properties identified as being subject to Redevelopment/Relocation Proceedings in the appendix to the Real Property Purchase Agreement. In respect of the Property situated at München, Neuhauser Strasse 18 (WE ) the dissolution of the silent partnership holding the Property is also a condition precedent to its sale. Rescission Rights (Rücktrittsrechte) Under the Real Property Purchase Agreement, a party has the right to rescind the agreement as it applies to a particular Property if the conditions precedent in relation to that Property are not fulfilled by 31 December 2006 (provided that this was not caused by the party seeking to rescind). The relevant seller has the right to extend this deadline to 31 March 2007 by written notice to the relevant buyer (provided that purchase price financing remains available). Warranties Each of the sellers gives the following warranties to the Borrower in respect of each Property sold by them: (a) it is a company correctly established under German law and has the right to enter into the legal transactions provided in this Agreement. The seller is neither over indebted nor insolvent nor under threat of insolvency; (b) it is the owner of the relevant Property and the holder of the relevant hereditary building rights as listed in the appendix to the Real Property Purchase Agreement, with the exception of the Property at Braunschweig, Poststrasse (WE ); (c) each Property is transferred free of encumbrances and limitations recorded in Division II and Division III of the land register except those assumed by the Borrower under the Real Property Purchase Agreement; (d) the Properties include the buildings shown in the drawings annexed to the Real Properties Purchase Agreement; (e) the seller has no knowledge that the initial construction of the buildings on a Property was not in compliance with the building permits required for that purpose in all major respects; (f) to the seller s knowledge, there are no encroachments onto properties of third parties that the third parties have requested to be removed or for which encroachment rent is currently being paid; (g) within the last two years prior to the date of signing, the competent authorities have not issued any requests to construct or redeem parking spaces that the seller has not complied with; (h) to seller s knowledge, there are no neighbourhood agreements concerning the Property nor any other obligations that are in opposition to the current use of the Properties; 222

223 (i) the Properties are not the subject of pending or threatened arbitration, court, or administrative proceedings unless otherwise indicated the appendix to the Real Properties Purchase Agreement; (j) no employment relationships are transferred to the Borrower with the purchase of the Property by operation of law; (k) to seller s knowledge, there are no revocations, rescissions, or objections to the permits governing the construction and use of the buildings that would impair the contractual use of the buildings by the tenants pursuant to the Master Lease or Permitted Subleases; (l) at the time of transfer of possession, no property taxes or public charges are in arrears. In connection with the warranties, the relevant seller also notes that the buildings on the Properties are old and subject to wear and tear and that this has been taken into account in calculating the purchase price. Therefore, unless the subject of a warranty in the Real Property Purchase Agreement, the Borrower is not entitled to claim in respect of any apparent or concealed defects on the Properties. The sellers also note that it is not possible to exclude the possibility of active or passive encroachments in respect of Properties subject to heritable building rights (in particular the construction of buildings over the boundaries of such heritable building rights). 223

224 APPENDIX 2 KARSTADTQUELLE AG, THE MASTER LESSEE AND THE MAJOR SUBTENANTS KarstadtQuelle AG KarstadtQuelle AG (Karstadt), a joint stock company (Aktiengesellschaft) organised in Germany, is a major department store and mail order group. It is registered under the name of Karstadt Quelle Aktiengesellschaft in the commercial register of the local court (Amtsgericht) in Essen, Germany. The registered office of the company is at Theodor-Althoff-Strasse 2, Essen, Germany. Pursuant to the Parent Guarantee, Karstadt guarantees the obligations of each of the Permitted Subtenants under the Permitted Subleases. Karstadt s Business Operations Karstadt operates its chain of department stores and its mail order business via four business divisions: over-the-counter retail, mail order, services and real estate business. In addition it has a 50 per cent. investment in Thomas Cook travel services. * Karstadt s over-the-counter retail division operates via 220 department stores and sports stores, located in city centres, medium-sized towns and city shopping centres in Germany. Of the 220 stores, 89 operate under the Karstadt name and traditional brand names such as KaDeWe (Kaufhaus des Westens), Hertie, Wertheim and Alsterhaus. Karstadt also operates 32 sports stores under the KarstadtSport brand. * Karstadt s mail-order business operates through two divisions: universal and specialty mail order business. The segment operates via 130 operating companies in 25 European countries. In addition it operates its own catalogue in over 20 countries. The universal mail order division operates via two core brands Quelle and Neckermann. The specialty mail order division operates through 21 international special mail-order suppliers: Afibel, Bon A Parte, Elégance, Hess Natur, Mode & Preis, and Walz. Each division concentrates its operations on a precisely defined target group. * Karstadt s service division operates the company s tourism, financial and information services, and customer relationship management service offerings. The tourism segment operates 408 travel agencies which together with its 50 per cent investment in the Thomas Cook Group forms part of Karstadt s core business. The internationally positioned tourism group Thomas Cook is number two in the tourism sector in Europe and offers services along the entire tourism value chain through air-flights, hotels, operators, sales and service agencies. The internationally diversified brand portfolio is constructed around the main brands, Neckermann Reisen and Thomas Cook. In Germany the Condor brand completes the portfolio with pure flight offerings. * Karstadt s real estate division is functionally divided up into the Property, Leasing and Real estate services sub-segments and is controlled through Karstadt Immobilien AG & Co. KG. Operations. The emphasis of the portfolio is on department store real estate at top locations in German cities. The real estate division offers customers a range of services such as development and letting, as well as centre, facility and construction management. Karstadt s property subdivision manages the company s department store real estate property, located in German towns and cities, specialty stores, logistics and administrative property. 224

225 Management Board The directors of Karstadt and their principal responsibilities are: Name Dr. Thomas Middelhoff (Chairman) Dr. Matthias Bellmann Prof. Dr. Helmut Merkel Marc Sommer Peter Michael Share Capital Responsibilities Corporate communications, Investor Relations, Law, Revision, Group tourism segment Human Resources/Labor Relations Director, KarstadtQuelle Management Consulting, KarstadtQuelle Neu project Purchasing, Logistics, IT, Environmental and Social Affairs Mail order, E-Commerce Over-the-counter retail The capital contributed by outside shareholders remains divided into 199,374,267 no-par value bearer notes with an individual value of A2.56. If the shares held by the company are also taken into account (11,424,883), the result is authorised capital of A539,646,000 and a total of 210,799,150 shares outstanding. Allianz AG 7.56% 5.42% Free Float 28.79% Pool "Madeleine Schickedanz" 58.23% Listings Karstadt s shares are listed on all German stock exchanges and on the electronic trading platform XETRA. Financial reports and further information in respect of KarstadtQuelle AG are available for download at The KarstadtQuelle AG website and the contents thereof do not form any part of this Prospectus. 225

226 APPENDIX 3 DETAILS OF PROPERTIES 226

227 WE Asset Address Post Code Location City Land Category Type Portfolio Tenure Tenant Name Lease Length Lease Start Date Lease Expiry Date Ground Rent Ground Lease Time to Expiry Retail KQ Retail Sublet Office Storage Residential Other Parking Spaces Total Lettable Area All-In-Cost Cushman OMV Cushman VPV Passing Rent Annual Maintenance Capex Reserve NOI CW Market Rent Senior B Loan ALA As of CW NOI 01-Sept-2006 Total Mezzanine Release Pricing Senior Release Pricing Mezzanine Deferred Capex Senior B loan ALA as of 20-Oct Bahnhofplatz City District München Bayern Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/2021 1,265, ,704 1, , ,238, ,460, ,388,129 8,530, ,916 6,989,429 10,024,192 6,867,626 88,277,247 30,778, % % 1,315,000 88,015, Neuhauser Str City Center München Bayern Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 30, , ,304, ,397,750 91,868,286 8,395, ,482 8,181,930 4,981,076 8,035,729 92,622,093 32,293, % % 0 92,347,750 (Oberpollinger) Kurfürstendamm City Center Berlin Berlin Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 23,762 1, ,704 99,450,802 97,836,958 87,567,416 4,838, ,991 4,703,057 4,761,431 4,587,065 65,740,074 22,920, % % 0 65,545, Pragerstraße City Center Dresden Sachsen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 27, ,405 87,318,943 91,210,437 84,535,451 5,464, ,007 5,261,559 6,021,407 5,180,195 62,000,566 21,616, % % 0 61,816, Hermannplatz / Hasenheide City District Berlin Berlin Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 25,488 5, ,170 93,336,782 88,725,114 75,064,028 6,600, ,645 6,322,355 6,499,085 6,271,456 63,165,286 22,023, % % 0 62,978, Westenhellweg City Center Dortmund Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 19, ,069 75,511,106 83,643,982 81,146,044 4,373, ,224 4,245,587 5,150,663 4,160,266 59,547,920 20,761, % % 0 59,371, Königstraße City Center Nürnberg Bayern Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/2021 1,185, , ,343 79,207,862 73,516,285 64,944,094 6,200, ,525 4,877,861 6,386,842 4,704,186 50,208,538 17,505, % % 0 50,059, Humboldtring City District Mülheim Baden-Wuertenberg Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 30,588 5, ,331 84,228,679 72,834,880 58,846,672 5,800, ,815 5,563,185 5,481,676 5,466,014 51,852,692 18,078, % % 30,000 51,699, Müllerstraße City District Berlin Berlin Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 18, ,057 64,956,628 61,814,510 54,011,025 4,500, ,502 4,367,498 4,647,409 4,289,882 44,007,058 15,343, % % 0 43,876, Breite Straße City Center Köln Nordrhein-Westfalen Department Store Department Stores B Partial Ownership Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,571 1, ,641 66,823,173 63,603,738 61,649,132 4,390, ,657 3,973,324 5,317,116 3,959,115 43,399,390 15,131, % % 120,000 43,270, Breiter Weg City Center Magdeburg Sachsen-Anhalt Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 18, ,477 39,688,030 37,891,062 33,120,073 3,058, ,475 2,923,880 3,283,460 2,880,325 26,975,449 9,405, % % 1,100,000 26,895, Georgstraße City Center Hannover Niedersachsen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 13, ,913 37,429,653 35,000,985 35,120,005 2,149,043 75,281 2,073,762 2,776,616 2,022,585 24,917,942 8,687, % % 0 24,844, Mönckebergstr. / Steintorwall / City Center Hamburg Hamburg Department Store (Sports) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 8, ,616 25,292,682 33,345,985 30,919,546 1,822,096 57,583 1,764,513 1,970,313 1,733,956 23,739,712 8,277, % % 0 23,669,396 Spitaler Str Schloßmühlendamm City District Hamburg Hamburg Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,387 36,622,387 30,723,129 25,575,004 2,662,249 97,515 2,535,207 2,679,010 2,491,687 21,872,445 7,626, % % 0 21,807, Theodorstr City District Berlin Berlin Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 11, ,376 38,993,591 38,711,501 34,076,704 2,799,585 88,768 2,710,817 2,911,513 2,671,721 27,559,537 9,608, % % 0 27,477, Louisenstraße City Center Bad Homburg Hessen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,029 28,787,951 25,857,791 22,488,042 1,907,262 78,855 1,828,407 1,971,277 1,808,945 18,408,709 6,418, % % 200,000 18,354, Schillerplatz City Center Iserlohn Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,754 24,697,795 22,445,284 20,075,687 1,859,100 90,365 1,768,735 2,059,970 1,759,091 15,979,273 5,571, % % 900,000 15,931, Poststraße City Center Braunschweig Niedersachsen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,884 20,862,090 21,128,780 20,319,897 1,568,739 53,340 1,515,399 1,929,754 1,478,059 15,042,026 5,244, % % 0 14,997, Poststraße City Center Bonn Nordrhein-Westfalen Department Store Department Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,446 25,013,781 20,672,313 18,513,508 2,198, ,790,667 2,444,793 1,619,549 14,717,057 5,131, % % 0 14,673, Osterstraße City District Hamburg Hamburg Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 8, ,430 19,992,980 19,164,586 17,268,336 1,433,533 80,106 1,353,427 1,585,348 1,354,280 13,643,674 4,756, % % 0 13,603, Riesstraße 61 (OEZ) City District München Bayern Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,614 25,448,194 20,190,900 17,812,659 1,377,596 54,034 1,323,562 1,442,836 1,292,358 14,374,329 5,011, % % 0 14,331, Markt City Center Recklinghausen Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 11, ,942 23,398,313 22,974,052 20,054,646 1,756,990 69,232 1,687,757 1,860,500 1,650,195 16,355,714 5,702, % % 0 16,307, Ludwigsstraße City Center Mainz Hessen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 10, ,976 29,429,691 11,058,549 14,972, ,041 56, ,901 1,529, ,721 7,872,815 2,744, % % 0 7,849, Bürgermeister-Smidt-Straße City Center Bremerhaven Bremen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 10, ,312 18,627,974 17,343,590 14,923,653 1,391,898 81,752 1,310,146 1,472,842 1,296,186 12,347,269 4,304, % % 0 12,310, Rosentorstraße City Center Goslar Niedersachsen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 7, ,560 20,088,930 19,087,039 15,627,960 1,495,932 68,017 1,427,915 1,423,075 1,420,652 13,588,467 4,737, % % 0 13,548, Markt City District Mönchengladbach Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 10, ,547 17,704,076 16,072,413 14,644,105 1,291,374 62,298 1,229,077 1,501,084 1,202,263 11,442,291 3,989, % % 0 11,408, Berliner Straße City Center Gütersloh Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 7, ,824 18,753,055 17,047,927 13,120,191 1,425,500 41,908 1,383,592 1,270,068 1,350,044 12,136,780 4,231, % % 0 12,100, Holm City Center Flensburg Schleswig-Holstein Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,156 23,355,772 15,092,204 11,687,970 1,485,620 94,493 1,391,127 1,435,282 1,391,102 10,744,459 3,746, % % 1,985,000 10,712, Lindenplatz City Center Offenburg Baden-Wuertenberg Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,609 17,243,973 15,448,697 12,917,159 1,352,227 73,843 1,233,795 1,381,838 1,225,041 10,998,255 3,834, % % 0 10,965, Großflecken 4 6 u City Center Neumünster Schleswig-Holstein Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,387 15,727,643 13,807,369 11,835,193 1,259,786 53,695 1,146,537 1,348,346 1,118,715 9,829,758 3,427, % % 0 9,800, Möllner Landstraße City District Hamburg Hamburg Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 8, ,990 15,228,546 14,165,292 12,133,636 1,153,480 78,041 1,075,439 1,213,864 1,076,468 10,084,571 3,516, % % 180,000 10,054, Ratsgasse City Center Dessau Sachsen-Anhalt Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 11, ,527 14,685,854 12,948,892 10,888,749 1,139,695 70,911 1,068,784 1,221,789 1,041,741 9,218,591 3,214, % % 0 9,191, Schleißheimer Straße City District München Bayern Department Store Department Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,475 14,538,792 13,443,879 11,855,122 1,850,568 80, ,782 1,966, ,192 9,570,982 3,336, % % 0 9,542, Marstall City Center Ludwigsburg Baden-Wuertenberg Department Store Department Stores B Partial Ownership Karstadt Warenhaus GmbH 15 01/07/ /07/ No 8, ,832 14,809,358 13,902,221 11,973,852 1,119,450 53,153 1,066,297 1,185,309 1,044,067 9,897,285 3,450, % % 0 9,867, Hardthöhe Edge Of Town Fürth Bayern Undeveloped Land Other B Freehold Quelle GmbH 15 01/07/ /07/ No ,232,752 2,416,365 5,756,679 1,593 51,656-50, ,561 1,720, , % % 0 1,715, De-Gasperi-Passage City Center Norderstedt Schleswig-Holstein Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 7, ,758 19,979,757 17,030,762 12,163,253 1,511,670 67,532 1,444,138 1,230,887 1,430,584 12,124,560 4,227, % % 0 12,088, Ländtorplatz City Center Landshut Bayern Department Store Department Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,737 13,405,409 11,861,875 11,626,088 1,496,697 57, ,620 1,808, ,967 8,444,720 2,944, % % 0 8,419, Hansa-Straße City Center Bottrop Nordrhein-Westfalen Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,186 15,184,281 13,103,990 11,200,553 1,226, ,153,885 1,314,547 1,042,293 9,329,008 3,252, % % 0 9,301, Bergstraße City Center Celle Niedersachsen Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,417 15,174,822 13,741,364 12,420,795 1,323,521 42,801 1,103,460 1,498,095 1,067,272 9,782,768 3,410, % % 0 9,753, Königsgraben City Center Memmingen Bayern Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,250 17,390,501 13,698,325 11,321,435 1,243,697 65,959 1,177,739 1,270,770 1,165,573 9,752,128 3,400, % % 0 9,723, Kölner Straße City Center Siegen Nordrhein-Westfalen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 8, ,655 21,566,928 17,155,398 11,061,661 1,550,287 44,128 1,506,158 1,102,083 1,461,081 12,213,291 4,258, % % 0 12,177, Brückenstraße City Center Gummersbach Nordrhein-Westfalen Department Store Department Stores B Partial Ownership Karstadt Warenhaus GmbH 15 01/07/ /07/ No 7, ,728 17,785,837 15,101,017 10,818,270 1,308,772 41,744 1,267,028 1,063,562 1,235,943 10,750,734 3,748, % % 0 10,718, Am Freiheitsplatz City Center Hanau Hessen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 9, ,211 13,032,291 12,549,835 11,811, ,471 63, ,586 1,196, ,086 8,934,493 3,115, % % 175,000 8,908, Simeonstraße City Center Trier Rheinland-Pfalz Department Store Department Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,267 13,894,568 12,432,557 11,232,013 1,617,056 66, ,660 1,815, ,321 8,851,001 3,085, % % 0 8,824, Brühl City Center Leipzig Sachsen Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 10, ,206 13,920,361 4,988, , , , ,513 3,551,655 1,238, % % 1,195,000 3,541, Ludwigsstraße 12 B City Center Mainz Hessen Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,441 7,334,797 8,764, ,605 48, , , ,988 5,221,797 1,820, % % 310,000 5,206, Vordere Insel Schütt City Center Nürnberg Bayern Car Park Parking B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,071,166 9,632,913 9,590, ,868 34, ,315 1,116, ,380 6,650,624 2,318, % % 0 6,630, Maximilianstraße City Center Bayreuth Bayern Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,969 10,161,813 8,349,549 7,300, ,103 47, ,640 1,096, ,553 5,944,221 2,072, % % 25,000 5,926, Kl. Packhofstr./ Heiliger Str./ City Center Hannover Niedersachsen Department Store (Sports) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 7, ,140 12,588,170 10,935,828 9,626, ,202 32, , , ,215 7,785,447 2,714, % % 0 7,762,387 Gr. Packhof Nürnberger Strasse / City District Fürth Bayern Office (Headquarters) Office B Freehold Quelle GmbH 15 01/07/ /07/ No 0 0 6,715 3, ,000 10,153,749 9,428,773 5,595, ,538 48, , , ,267 6,712,543 2,340, % % 0 6,692,660 Finkenstrasse Hutfilterstraße City Center Bremen Bremen Retail Warehouse (Other) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, ,905 6,243,265 6,315,356 7,992, ,796 16, ,043 1,198, ,033 4,496,035 1,567, % % 0 4,482, Bergedorfer Markt City District Hamburg Hamburg Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 3, ,199 9,188,708 8,922,533 7,539, ,752 15, , , ,242 6,352,140 2,214, % % 70,000 6,333, Sigmundstrasse City District Nürnberg Bayern Retail Warehouse/Logistics Specialised Stores B Freehold Quelle GmbH 15 01/07/ /07/ No , ,868 7,517,088 8,318,053 5,097, ,689 35, , , ,282 5,921,798 2,064, % % 25,000 5,904, Rankestraße City Center Berlin Berlin Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,982 8,754,119 7,010, ,543 81, , , ,797 6,018,338 2,098, % % 0 6,000, Sachsentor 33/Bergedorfer City District Hamburg Hamburg Department Store Department Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,184 2,776,850 3,658,316 4,523, ,577 30, , , ,966 2,604, , % % 45,000 2,596,719 Schloß Hornschuchpromenade City District Fürth Bayern Office Office B Freehold Quelle GmbH 15 01/07/ /07/ No 0 0 5, ,880 4,582,486 3,868,657 2,526, ,900 26, , , ,022 2,754, , % % 0 2,746, Karl-Marx-Str City District Berlin Berlin Department Store Department Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 16, ,884 2,877,847 2,897,315 4,758, , , , ,741 2,062, , % % 0 2,056, Schöne Aussicht City Center Bad Homburg Hessen Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,046,602 4,860,939 4,255, ,000 1, , , ,265 3,460,605 1,206, % % 0 3,450, Schopfheimer Str City District Lörrach-Brombach Baden-Wuertenberg Logistics Other B Freehold Quelle GmbH 15 01/07/ /07/ No 0 0 3,164 17, ,430 4,625,020 2,934,262 1,850, ,262 60, , , ,156 2,088, , % % 0 2,082, Holstenstraße 55/ City Center Kiel Schleswig-Holstein Department Store (Sports) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, ,562 4,036,593 3,343,715 3,262, ,619 18, , , ,718 2,380, , % % 185,000 2,373, Eggerstedterstraße City Center Kiel Schleswig-Holstein Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,096,180 4,472,233 6,917, ,396 31, , , ,708 3,183,877 1,110, % % 0 3,174, Fürther Strasse City District Nürnberg Bayern Logistics Other B Freehold Quelle GmbH 15 01/07/ /07/ No 0 0 1,003 21, ,307 2,760, , , ,475 79, , , , , , % % 50, , Weender Straße 12/ City Center Göttingen Niedersachsen Department Store (Sports) Specialised Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,235 6,290,809 4,088,323 1,648, ,000 18, , , ,493 2,910,564 1,014, % % 0 2,901,943 (Kornmarkt 12) Wehdehof City Center Lübeck Schleswig-Holstein Car Park Parking B Partial Ownership Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,609,408 3,320,746 2,661, ,356 9, , , ,829 2,364, , % % 0 2,357, Maximiliansplatz City Center Bamberg Bayern Car Park Parking B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/2021 6, ,108,730 5,513,628 3,114, ,242 21, , , ,016 3,925,268 1,368, % % 0 3,913, Davoser Straße 75/St. -Gotth City District Bremen Bremen Retail Warehouse (Other) Specialised Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,771 4,311,709 3,260,224 2,593, ,274 15, , , ,655 2,321, , % % 0 2,314,148 Str Woldenbergstraße City Center Goslar Niedersachsen Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,880,229 3,782,598 3,298, , , , ,425 2,692, , % % 0 2,684, Schaumburgstraße City Center Recklinghausen Nordrhein-Westfalen Department Store (Sports) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, ,642 2,809,265 2,656,012 2,579, ,240 13, , , ,424 1,890, , % % 0 1,885, Schaumburgstraße City Center Recklinghausen Nordrhein-Westfalen Office Office B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, , , ,029 3,247,267 2,694,953 1,610, ,373 24, , , ,806 1,918, , % % 0 1,912, Julius-Bührer-Straße City Center Singen Baden-Wuertenberg Car Park Parking B Partial Ownership Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,959,021 3,249,300 2,735, ,151 25, , , ,638 2,313, , % % 0 2,306, Großflecken City Center Neumünster Schleswig-Holstein Car Park Parking B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,423,379 1,219,892 1,072, ,657 20,403 86, ,477 99, , , % % 0 865, Groner Str a City Center Göttingen Niedersachsen Mixed Use Other B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,414 2,392,398 1,739,833 1,746, ,355 9, , , ,906 1,238, , % % 120,000 1,234, Osterstraße City District Hamburg Hamburg Department Store (Sports) Specialised Stores B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,946,764 4,289,518 3,778, ,266 17, , , ,285 3,053,798 1,064, % % 100,000 3,044, Vor dem Steintor 74/ City District Bremen Bremen Retail Warehouse (Other) Specialised Stores B Mixed Karstadt Warenhaus GmbH 15 01/07/ /07/ , , ,391 2,548,147 1,397, , ,853 11, , , , , , % % 0 991, Passauer Str City Center Berlin Berlin Mixed Use Other B Freehold Vacant 0 0 No , ,701 1,367,379 1,658,075 1,658, ,180, , % % 0 1,176, Ansbacher Straße City Center Berlin Berlin Mixed Use Other B Freehold Vacant 0 0 No , , ,256 1,533,925 1,533, ,092, , % % 0 1,088, Merseburger Straße 4177 City District Leipzig Sachsen Retail Warehouse Specialised Stores B Freehold Vacant 0 0 No 3, , , ,930-14, % % Königswarter Strasse City District Fürth Bayern Office Office B Partial Ownership Quelle GmbH 15 01/07/ /07/ No 0 0 1, ,179 1,618,545 1,363, , ,657 9, , , , , , % % 0 967, Jakobinenstrasse City District Fürth Bayern Office Office B Freehold Quelle GmbH 15 01/07/ /07/ No 0 0 1, ,831 1,508,843 1,330, , ,888 8, , , , , , % % 0 944, Antonstraße City District Berlin Berlin Office Office B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No , , , , ,745 50,441 5,854 44,586 52,124 43, , , % % 0 350, Lange Str. 96/97 (verg. als City Center Delmenhorst Niedersachsen Heritable Building Right granted to third Other B Freehold Third Party 57 01/01/ /01/ No ,040,378 1,464,496 1,302,163 87, ,980 87,180 85,437 1,042, , % % 0 1,039,518 Erbbau) party Elsa-Brandström-Str. 6 (verg City Center Bielefeld Nordrhein-Westfalen Heritable Building Right granted to third Other B Freehold Third Party 10 01/01/ /01/ No ,084,336 1,366,751 1,224,504 81, ,781 81,981 80, , , % % 0 970,137 als Erb.) party Königstraße City Center Gütersloh Nordrhein-Westfalen Car Park Parking B Leasehold Karstadt Warenhaus GmbH 15 01/07/ /07/ , ,525,492 2,097,045 3,167, ,000 19, , , ,905 1,492, , % % 0 1,488, Höfener Strasse City District Nürnberg Bayern Office Office B Freehold Quelle GmbH 15 01/07/ /07/ No ,535 1,184,472 1,238, ,526 96,162 7,698 88,463 84,008 88, , , % % 0 879, Schwabacher Strasse City District Fürth Bayern Mixed Use Other B Freehold Quelle GmbH 15 01/07/ /07/ No , ,205 1,166, , , ,778 9,204 96, ,812 94, , , % % 0 700, Lange Str. 34 / Meckstrasse City District Fürth Bayern Car Park Parking B Freehold Quelle GmbH 15 01/07/ /07/ No , , , ,392-1, , ,216 75, % % 0 215, Bahnhofstr.23/Borgmannstr.12/ City District Berlin Berlin Mixed Use Other B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, , , , ,654 84,431 2,246 82,186 86,760 75, , , % % 0 648,919 Elcknerplatz Bahnhof- / Lörracher Straße Out Of Town Steinen Baden-Wuertenberg Logistics/Office Other B Freehold Vacant 0 0 No , ,800 22, , , ,319-10, , , % % 0 684, Nürnberger Strasse Edge Of Town Fürth Bayern Office Office B Freehold Quelle GmbH 15 01/07/ /07/ No , , , ,073 67,313 5,285 62,028 65,621 61, , , % % 0 530, Spiegelstrasse City District Fürth Bayern Office Office B Freehold Quelle GmbH 15 01/07/ /07/ No , , ,109 52,470 5,609 46,860 41,820 48, , , % % 0 335, Wandsbeker Königstraße City District Hamburg Hamburg Retail Warehouse (Carpet) Specialised Stores B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No 1, , , , ,350 80,636 5,727 74,908 86,858 70, , , % % 135, , Universitätsstr. 41 / Beekstraße City Center Duisburg Nordrhein-Westfalen Retail Warehouse (Other) Specialised Stores B Freehold Vacant 0 31/08/ No , , , ,104-4, ,391 25, % % 0 72, Elcknerplatz City District Berlin Berlin Mixed Use Other B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,148 43, ,228 2, , ,646 10, % % 0 30, Nürnberger Strasse City District Fürth Bayern Undeveloped Land (Car Park) Other B Freehold Quelle GmbH 15 01/07/ /07/ No , , , ,815 31, % % 0 90, Süderhofenden 10 (unbebaut) City Center Flensburg Schleswig-Holstein Undeveloped Land Other B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No , , , ,150 32, % % 0 91, Hornschuchpromenade City District Fürth Bayern Undeveloped Land (Car Park) Other B Freehold Quelle GmbH 15 01/07/ /07/ No , , , ,417 35, % % 0 101, Lise-Meitner-Strasse Edge Of Town Itzehoe Schleswig-Holstein Retail Warehouse (Garden) Specialised Stores B Freehold Quelle GmbH 15 01/07/ /07/ No 2, ,600 92, , ,309 23,079 7,737 15,342 78,000 7, ,290 56, % % 0 161, Sommerwohlenstr. 1a City Center Goslar Niedersachsen Car Park Parking B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No , , ,883 15, ,607 15,859 15, ,274 48, % % 0 137, Wandererstr. 147 / Menzelhof City District Nürnberg Bayern Mixed Use Other B Freehold Quelle GmbH 15 01/07/ /07/ No , , ,821 19,232 2,449 16,783 26,876 16, ,412 71, % % 0 204, Wandererstrasse 159 B City District Nürnberg Bayern Car Park Parking B Freehold Quelle GmbH 15 01/07/ /07/ No ,883 38, , ,151 9, % % 0 27, Beekstraße City Center Duisburg Nordrhein-Westfalen Undeveloped Land (Car Park) Other B Freehold Karstadt Warenhaus GmbH 15 01/07/ /07/ No ,532 40, , ,112 10, % % 0 29, Wanderestrasse City District Nürnberg Bayern Car Park Parking B Freehold Quelle GmbH 15 01/07/ /07/ No ,600 26, , ,665 6, % % 0 18, Lange Strasse City District Fürth Bayern Residential Other B Freehold Quelle GmbH 15 01/07/ /07/ No ,711 70,009 66,981 6, ,277 10,080 6,003 49,841 17, % % 0 49, Wandererstr City District Nürnberg Bayern Car Park Parking B Freehold Quelle GmbH 15 01/07/ /07/ No ,426 25,052 85, ,835 6, % % 0 17, Elcknerplatz City District Berlin Berlin Mixed Use Other B Freehold Vacant 0 0 No ,486 85,311 85, ,735 21, % % 0 60, Augsburger Strasse City District Nürnberg Bayern Residential Other B Freehold Quelle GmbH 15 01/07/ /07/ No ,442 83,271 69,184 7, ,295 7,500 6,369 59,282 20, % % 0 59, Augsburger Strasse City District Nürnberg Bayern Residential Other B Freehold Quelle GmbH 15 01/07/ /07/ No ,337 56,234 47,045 4, ,393 5,100 4,286 40,034 13, % % 0 39, Stresemannstrasse / Herforder City Center Bielefeld Nordrhein-Westfalen Retail Units Other B Leasehold Quelle GmbH 15 01/07/ /07/ , , ,980 2,498, , , ,324 13,101 23, ,861 20, ,300 61, % % 0 174,781 Str Rollbergstr City District Berlin Berlin Car Park Parking B Freehold Vacant 0 0 No ,478 4,753,107 4,092, ,123-60, ,107-9,195 3,383,837 1,179, % % 0 3,373,

228 APPENDIX 4 TERM SHEET 228

229 IS NOTE Fleet Street Finance Two P.L.C. - CMBS Security Issuance Issue: Arranger: Issuer: Purpose: Collateral: Eurobond with Reg S distribution Goldman Sachs International Fleet Street Finance Two P.L.C., which is an SPV incorporated in Ireland To raise funds for the Issuer to purchase the collateral A single commercial loan with the following characteristics: Number of Aggregate Cut-off Maturity Cut-off Mortgaged Mortgaged Property Balance at Issue Date Loan Loan to Cut-off Date Properties Asset Type Valuation ( ) Date ( ) to Value Value 1 Date ICR DSCR 109 Retail 1,707,946,387 1,192,021, % 0.0% 2.39 x 1.86 x Pool Breakdown by Asset Type (by Value) Pool Breakdown by Geographic Location Specialised Stores 4.6% Parking 3.5% Office 1.3% Other 1.1% Other West Germany 15.9% Other East Germany 8.6% Bavaria 26.7% Department Stores 89.6% Baden-Wurttemberg 6.4% Hamburg 6.7% Berlin 18.0% North Rhine Westphalia 17.6% Security: The commercial loan is secured by: First ranking mortgages over the Properties First ranking pledge of partnership interest First ranking assignment of rent, hedging and insurances Floating and/or fixed charges over the bank accounts Loan Features: 5-year mortgage loan maturing in July 2011 The Borrower has hedged the interest rate through a EURIBOR cap for the entire life of the loan. The cap amortises according to the Borrower s disposal plan delayed by 6 months The collateral loan amortises at a rate of 0.25% of the initial loan balance per quarter The Borrower is required to maintain the Interest Cover Ratio at not less than 1.35:1 for more than two consecutive quarters. The Borrower must maintain a Loan to Value of at least 70% A mezzanine facility of million allocated to the collateral assets, with a second lien in the security package on this loan is in place The Borrower can sell assets subject to repaying the debt by an amount equal to the release amount of the asset sold. The release amount equals to % (weighted average 115%) of the loan amount allocated to each asset Class Expected Rating (S&P / Moody s / Fitch) Type Amount ( m) Expected Average Life (years) 1 Expected First Principal Payment Date Expected Final Payment Date 1 Final Legal Maturity A AAA/Aaa/AAA FRN [780.0] 2.8 January 2007 January 2011 July 2014 B AA/-/AA FRN [170.0] 3.0 January 2007 January 2011 July 2014 C A/-/A FRN [143.1] 3.0 January 2007 January 2011 July 2014 D BBB/-/BBB FRN [98.9] 3.0 January 2007 January 2011 July 2014 TOTAL [1,192.0] 1 Assuming the issuer exercises its option to redeem the notes upon the aggregate principal amount outstanding of the notes becoming less than 10% 229

230 Status and Form: The Notes constitute direct, and upon issue, unconditional and unsubordinated (except in relation to Prepayment Fees and Retained Interest) obligations of the Issuer and are secured over substantially all of the Issuer s assets. The Notes are global bearer notes. Issue Type: The Class A Notes will bear interest at the rate of EURIBOR and a margin of [ ] per cent per annum. The Class A Notes will rank senior to the Class B, C and D Notes. The Class B Notes will bear interest at the rate of EURIBOR and a margin of [ ] per cent per annum. The Class B Notes will rank senior to the Class C and D Notes. The Class C Notes will bear interest at the rate of EURIBOR and a margin of [ ] per cent per annum. The Class C Notes will rank senior to the Class D Notes. The Class D Notes will bear interest at the rate of EURIBOR and a margin of [ ] per cent per annum. Coupon Dates: 26 th of October, January, April and July Available Funds Cap Class D Notes only. Listing and Minimum Irish Stock Exchange ( ISE ); 50,000 minimum denominations, with integral multiples of 1,000 therafter Denominations: Governing Law: English Clearance: Euroclear / Clearstream, Luxembourg Expected Timing of the Transaction: Redemption Profile Early redemption at the Option of the Issuer: Cross Default Negative Pledge Roadshows in week commencing 11 th September 24 th October Final Close and Settlement Available principal collections shall be applied as follows: Scheduled amortisation payments under the KarstadtQuelle Mortgage Loan shall be applied sequentially to Classes A to D. Any disposal proceeds shall be applied pro rata to Classes A to D for the allocated loan amount, and sequentially to Classes A to D for the release premium. The Notes may be redeemed at the option of the Issuer, in full but not in part, if on any Payment Date, the aggregate Principal Amount Outstanding of the Notes is less than 10% of the aggregate Principal Amount Outstanding of all of the Notes issued on the Issue Date or for tax reasons. N/A Yes Selling Restrictions: U.S. (Reg S only), U.K., Japan, Ireland, France and EEA. Tax All payments of interest on and repayments of principal in respect of the Notes will be made subject to any applicable withholding or deduction for or on account of any tax, and neither the Issuer nor any other person will be obliged to pay any additional amounts to the Noteholders in respect of any amounts required to withheld or deducted. Liquidity Facility: [82,600,000] of liquidity initially expected to be provided by Lloyds TSB Bank plc (rated Aaa/AA/AA+ by Moody s, S&P and Fitch respectively) used to fund scheduled payments of interest in respect of all Classes of Notes. It will not be available to pay any principal amounts. Interest Rate Basis Goldman Sachs Mitsui Marine Derivative Products L.P. (rated AAA/ Aaa by S&P and Moody s respectively) Swap Provider: Interest Rate Basis Swap: Issuer Security Trustee and Note Trustee: Paying Agent and Account Bank: Cash Manager: Servicer: The Issuer will enter into a swap to hedge the basis risk between the interest rate on the collateral (where 3 month EURIBOR is set on the 18 th of October, January, April and July) and the interest rate on the Notes (where 3 month EURIBOR is set on the 24 th of October, January, April and July). Will rank senior to the Notes in an event of default, unless the default was caused by the Swap Counterparty Deutsche Trustee Company Limited Deutsche Bank AG, London Branch (rated P-1/Aa3 by Moody s and F1+ by Fitch) Deutsche Bank AG, London Branch (rated P-1/Aa3 by Moody s and F1+ by Fitch) Capmark Services Ireland Limited and Capmark Services UK Limited (rated CPS1 minus by Fitch and Strong by S&P and CSS2 minus by Fitch and Above Average by S&P respectively) Capmark Services UK Limited (rated CSS2 minus by Fitch and Above Average by S&P respectively) Special Servicer: Bloomberg Ticker: FLTST <MTGE> Analytics Provider: Trepp, LLC, via Bloomberg and its website, and Intex Collateral Information 230

231 Fleet Street Finance II Transaction Overview Selected Key Economic Loan and Portfolio Terms Mortgage Loan Information Originator Goldman Sachs Credit Partners L.P. Borrower Highstreet Portfolio B GbR (a newly formed SPV) Closing Date 30 June 2006 Maturity 20 July 2011 Last Drawdown 31 August 2006 Extension Options None Amount at 1,192,021,267 Mezzanine Loan 415,607,676 Securitisation (fully drawn) Allocated to Portfolio Loan Interest Floating Rate: 3-month Euribor + margin Scheduled Amortisation 1.00% of the original debt amount per annum paid quarterly Loan Interest Payment Date Borrower Interest Rate Hedge Call Protection ICR on the Loan (1st Quarter) Cut Off Date Loanto-Open Market Value Cut Off Date Loanto-Vacant Possession Value Quarterly: 20 October, 20 January, 20 April and 20 July Through a cap agreement Prepayment fees applicable for the first three years of the transaction. First Loan Interest Payment Date Borrower Hedge Provider Call Protection Expiry Date 2.39x DSCR on the Loan 1.86x (1st Quarter) 69.8% LTV Ratio at Maturity 1 0.0% 79.7% Loan-to-Vacant Possession Value at Maturity 2 20 October 2006 Goldman Sachs Capital Markets L.P. 3 July % Portfolio Overview Number of Properties Total Lettable Area Day-1 Passing Rent Sub-Tenants Portfolio Information 109 Location Across Germany 797,726 square metres Property Type 3 Retail (94.2%), parking (3.5%), office (1.3%) and other (1.1%) 127,434,144 per annum ( 13.3 per square metre per month) Karstadt Warenhaus GmbH (KQ subsidiary): 97.1% of total gross rent Quelle AG (KQ subsidiary): 2.8% Third Parties: 0.1% Lease Start Date For KQ subsidiaries: 1 July 2006 Third Parties: various Tenure (By OMV) Freehold (70%) Hereditary Building Rights (5%) Mixed (19%) Partial Ownership (6%) Day-1 Net Operating Income Vacancy 115,450,444 Portfolio is 99.7% let (by market rent) Lease Expiry Date For KQ subsidiaries: 1 July 2021 Third Parties: various Day-1 Ground Rent 6,727,774 per annum 1 Assuming Borrower meets their business plan 2 Assuming Borrower meets their business plan 3 Percentage of total open market value 231

232 Sponsor The Whitehall Funds (51%) KarstadtQuelle AG (49%) Portfolio Information Asset Management Archon Group Property Valuer Cushman & Wakefield Chartered Surveyors Valuation Date 1 July 2006 Open Market Value 1,707,946,387 ( 2,141 psm) Vacant Possession Value 1,496,462,845 ( 1,876 psm) Market Rental Value 132,774,087 ( 13.9 per square metre per month) Stores Parking Others 2 7 Niedersachsen 7% 3 Bremen 2% Schleswig- Holstein 3% Hamburg 7% 2 Mecklenburg- Vorpommern Brandenburg Berlin 18% Sachsen- Anhalt 3% Nordrhein- Westfalen 18% Hessen 4% Thüringen Sachsen 6% 2 2 Rheinland- Pfalz 1% Saarland Baden- Württernberg 6% Bayern 27% 232

233 Overview of The Five Largest Assets 1. Neuhauser Str. 18 (Oberpollinger), Munich (WE ) Lettable Area 30,945 sqm Parking Spaces OMV % of Total VPV % of Total Passing Rent ,397, % 91,868, % 8,395,413 ( 23 psm per month) % of Total Year of Construction Date of Refurbishment 6.6% The city of Munich is the capital of the federal state of Bavaria and is one of the largest cities in Germany. Numerous multinational companies have their headquarters here, as have several renowned institutes of research and science. The Oberpollinger department store is located on Neuhauser Strasse, Munich s most frequented shopping street in direct proximity to Karlsplatz. Due to its corner position and its architecture, the property has high visibility. Furthermore, it is well connected to the public transport network via the Stachus local rail and underground station. Public transport stops and an underground station are approx. 50 m away. This square is one of the busiest urban transport hubs in Europe, both as a pedestrian and road traffic junction and as the meeting point of several urban railway and underground routes. In the surroundings there are commercial, retail and residential properties. Some buildings are listed as being under historical building protection. The building consists of two sections: a department store ("A") and a future parking and office building ("B"). "A" has seven floors with a basement area, and comprises retail space, technical rooms and storage areas. There are two entrances, one main entrance at the front of the building and one side entrance. There is also a bridge at first floor level and a tunnel at basement level, connecting to the adjacent Karstadt Sporthaus at Neuhauser Strasse 20. Section B of the building is currently being redeveloped. The reopening is anticipated for the autumn of A parking garage is located underneath the building. 233

234 2. Bahnhofplatz 7, Munich (WE ) Lettable Area 36,923 sqm Parking Spaces OMV % of Total VPV % of Total Passing Rent ,460, % 127,388, % 8,530,959 ( 19 psm per month) % of Total Year of Construction Date of Refurbishment 6.7% 1900 / The subject property is situated in the city centre of Munich, opposite the main station, approx. 300 m away from Munich's main shopping street Kaufingerstraße, and around 1.7 km from the Isar river. Traffic connections are good and the property is especially well connected to the public transport network: the basement of the store has direct access to one of the main local rail and underground stations, the "Stachus". Due to its corner position and its architecture, the property has high visibility. The micro location is appropriate for retail use both by pedestrian shoppers and for car based shopping, due to the department store s car parking facility. In the surroundings commercial and retail properties prevail. The subject property is department store comprising an older and a newer building part. The buildings are connected by a bridge on all floors apart from the ground floor. The old building, which was constructed in approx. 1900, is a former apartment building now redeveloped with six storeys of department store space with an additional basement and is under historical protection. There are two direct links to the subway at first basement level. The newer building was constructed in 1971 and has six storeys of department store space with five additional basements. Karstadt's underground parking garage has 525 parking spaces situated in the basement of the new building. Both buildings allow access to the department store from all four sides. The old building includes a food market and fast food & coffee shops in the basement. In each building the ground to fourth floors are predominately used as retail areas. The 4th floor of the old building contains a restaurant with kitchen. The 5 th floor is used for offices, social facilities, storage and building services. 234

235 3. Kurfürstendamm 231 (Wertheim), Berlin (WE ) Lettable Area 25,704 sqm Parking Spaces OMV % of Total VPV % of Total Passing Rent 0 97,836, % 87,567, % 4,838,047 ( 16 psm per month) % of Total Year of Construction Date of Refurbishment 3.8% The city of Berlin is the capital of Germany, has the highest population in Germany and is also the city with the largest area. Berlin constitutes a self-contained federal state in the Federal Republic of Germany. The city has a population of some 3.4 million. The city has a rich historical heritage and constitutes an attractive economic location. Traffic connections are good; Berlin is connected to the federal motorway system via the A111, A113 and the A115. The property is situated in the district of Charlottenburg, 6 km southwest of Berlin's city centre, in a prime position on the well-known and highly frequented shopping street "Kurfürstendamm". Furthermore, it is well connected to the public transport network. The property is surrounded by a mixture of commercial and residential buildings with retail use, offices, gastronomy and hotels. The property is developed as a six storey department store with an additional basement level and an upper floor for technical installations on the flat roof. The department store is connected to an adjacent parking garage and an office building via a passage under the office building and another entrance which links the department store with the parking garage. From the basement to the 4 th floor there are retail areas. Office and storage areas are on the 5 th floor. The restaurant is on the 6 th floor. 235

236 4. Pragerstraße 12, Dresden (WE ) Lettable Area 28,405 sqm Parking Spaces OMV % of Total VPV % of Total Passing Rent ,210, % 84,535, % 5,464,566 ( 16 psm per month) % of Total Year of Construction Date of Refurbishment 4.3% Dresden is situated in the eastern part of Germany and is the capital of the Federal State of Saxony. The city of Dresden is situated some 190 km south of Berlin close to the cities of Leipzig and Chemnitz. The Polish and the Czech borders are situated approximately 90 km to the west and some 40 km to the southwest respectively. Due to its location Dresden benefits from an excellent traffic infrastructure (A4, A13 and A14 motorways). Furthermore, Dresden is well-known for its historical buildings such as the Frauenkirche, Semperoper and Zwinger which attract millions of tourists every year. The department store is situated in the city centre and offers direct access to Dresden s pedestrian zone, Prager Straße, which is one of the most frequented shopping streets in Dresden. Due to its freestanding position the main building has high visibility. The department store is well connected to the public transport network. The micro location is appropriate for retail use both by pedestrian shoppers and for car based shopping due to the department store s car parking facility. In direct proximity the "Altmarkt- Galerie" managed by ECE comprises more than 100 shops on 26,000 m². The site is surrounded by commercial buildings, department stores and hotels. Main station, tram and bus stops are within walking distance. The subject property constitutes a department store distributed over six floors and three basement levels, with an additional technical storey on the flat roof. The underground parking garage of the department store is located on the second and third basement levels. All levels from the first basement to the third floor predominately comprises sales area. A restaurant with a kitchen, offices and social facilities are located on the fourth floor, and the fifth floor contains storage and building services. A separate parking area is located adjacent to the department store. Upon inspection, the property appeared to be in good condition and its technical facilities appeared to be well maintained. The property is provided with electricity, water and telephone and is connected to district heating. 236

237 5. Hermannplatz, Berlin (WE ) Lettable Area 31,170 sqm Parking Spaces OMV % of Total VPV % of Total Passing Rent ,725, % 75,064, % 6,600,000 ( 18 psm per month) % of Total Year of Construction Date of Refurbishment 5.2% The building is situated in the Kreuzberg district of Berlin, directly on the B179 main road "Hasenheide / Karl-Marx-Straße", which binds the city centre with the A 100 motorway. Access by public transport is also very good. The department store has a direct connection to the Hermannplatz underground station and Berlin-Tempelhof airport is situated nearby. The surroundings consist of a mixture of commercial, retail, office and residential buildings. The property consists of three building sections. The first is a department store, the second a residential and office building and the third a parking garage. The department store comprises a seven storey old building and a four storey new building, both with additional basements. In the first basement there are changing rooms, logistics and delivery areas as well as storage rooms and retail areas. The second basement contains technical rooms (also in the fifth storey) and the passage to the underground train station, which crosses the site. The ground floor to third floors are predominantly retail with office areas. The restaurant with kitchen is on the fourth floor. The parking garage was constructed in The parking building has two separate sets of entrance and exit gateways, the approach to the parking levels is effected by a spiral ramp. The multi storey parking garage has six storeys and 635 parking spaces. The residential and office building is developed with six storeys including the attic storey and is currently used as office area from the ground to third floors. The year of construction is estimated at 1910 in the absence of detailed information. Overall, the general condition of the property was found to be good. 237

238 This document has been prepared for information purposes only by Goldman Sachs International ( Goldman Sachs ) and Lehman Brothers International (Europe) ( Lehman Brothers ) (together the Managers ). The investments and investment services referred to herein are not available to private customers within the meaning of the rules of the Financial Services Authority nor in any jurisdiction in which the distribution of this document would be prohibited. Any offer or sale of the securities (or related securities or other financial instruments or their related derivatives) ("Securities") discussed herein in certain jurisdictions may be restricted by law. Potential investors are required to inform themselves of, and observe, any such restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. These materials are not an offer to sell or a solicitation of any offer to buy the securities in the United States. The securities have not been, and will not be, registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933) absent registration or an exemption from registration. There will be no public offer of securities in the United States. This document is being distributed only to and directed only at (i) persons who are outside the United Kingdom, (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or (iii) those persons to whom it may otherwise lawfully be distributed (all such persons together being referred to as "relevant persons"). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. This document should not be construed as an offer or solicitation to buy or sell any securities or any interest in securities and does not constitute a prospectus or other offering document in whole or in part. The information in this document is confidential and is intended for use only by the recipient. It should not be reproduced or disclosed to any other person without the consent of the Managers. This document remains the property of the Managers and must be returned to the Managers on request and any copies you have made must be destroyed. The information contained herein has been prepared by the Managers to assist interested parties in making a preliminary analysis of the transaction described herein and does not purport to be allinclusive or to contain all of the information that a prospective investor may require to make a full analysis of the transaction. Each recipient of this document should make its own independent evaluation of the transaction and of the relevance and adequacy of the information in this document and should make such other investigations as it deems necessary to determine whether to participate in the transaction. In furnishing this document, neither the Issuer nor the Managers undertake any obligation to provide you with access to any additional information or to update this document or additional information or to correct any inaccuracies therein which may become apparent. No representation or warranty can be given with respect to the accuracy or completeness of the information contained in this document, or that any offer of securities will conform to the terms hereof. If any such offer of securities is made, it will be made pursuant to a definitive Prospectus, prepared by the Issuer (the Prospectus ), which will contain material information not contained herein. In the event of any such offering, the information shall be deemed superseded and replaced in its entirety by such Prospectus which will be made available by the Managers. Neither the Issuer nor any of the Managers and their respective affiliates, agents and representatives make any representation and have given you no advice concerning the appropriate legal treatment, regulatory treatment, accounting treatment, or possible tax consequences in connection with the transaction described herein. Prior to entering any proposed transaction, you should determine, without reliance upon the Issuer, or any of the Managers and their respective agents and representatives, the economic risk and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction, and that you are able to assume these risks. Investors should conduct their own analysis, using such assumptions as they deem appropriate in making an investment decision. Neither the Issuer nor any of the Managers makes any representation or warranty (express or implied) of any nature, nor do they accept any responsibility or liability of any kind (consequential or direct), with respect to the accuracy or completeness of the information in this document. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable laws or regulations of any jurisdiction which may not lawfully be disclaimed. The Managers and their connected companies, employees or clients may have an interest in the Securities mentioned in this document. This may involve activities such as dealing in, holding, acting as market-makers, or performing financial or advisory services, in relation to any of the Securities referred to in this document. They may also have acted as a manager or co-manager of a public offering of such Securities, and may also have an investment banking relationship with any companies mentioned in this document. A recipient of this document should not rely on any representation or undertaking inconsistent with the above paragraphs. This document is issued by, Goldman Sachs and Lehman Brothers each of which is regulated and authorised by the Financial Services Authority. Any views or opinions (including statements or forecasts) constitute our judgment as of the date indicated and are subject to change without notice. Copyright in this report is owned by the Managers - no part of this report may be reproduced in any manner without the prior written permission of Goldman Sachs and Lehman Brothers. 238

239 APPENDIX 5 INDEX OF PRINCIPAL DEFINITIONS A...4 Account Bank...60, 96 Accountholder , 171 Accounting Report...60 Accrued Interest Acquisition Documentation...61 Additional Interest Administrative Cost Factor Administrative Cost Rate Administrative Fees Adverse Rating Event AFC Additional Interest AFC Deferred Interest Agency Agreement...9, 169 Agent Bank...9, 169 Agents All-in Cost...61 Allocated Loan Amount...61 Allocated Mezzanine Interest...61 Amortisation Instalment...73 Ancillary Costs Applicable Accounting Principles...61 Appraisal Reduction , 186 Appraisal Reduction Amount Arranger...11 Asset Management Services Agreement...61 Assignment Agreements...70 Assignment of Acquisition Documentation...69 Assignment of Hedge Documents...69 Assignment of Insurance...69 Assignment of Leases...69 Authorised Entity Available Interest Collections...28, 152 Available Principal Collections...31, 153, 182 B Portfolio Deferred Capex Account...61 B Portfolio Maintenance Capex Account...61 B Portfolio Rent Account...61 Basel Committee...58 Basic Terms Modification Basis Swap Agreement...10 Basis Swap Agreement Credit Support Document Basis Swap Collateral Basis Swap Counterparty...10 Basis Swap Subordinated Amount...30, 153 Basis Swap Transaction...25, 148 Basis Swap Trigger Borrower... 1, 8, 60, 219 Borrower Account...96 Borrower Account Pledge Agreement...68 Borrower Account Pledge Agreements...68 Borrower Accounts...96 Borrower and Master Lessee Account Pledge Agreement

240 Borrower and Master Lessee Account Pledge Agreements...68 Borrower Assignment of Services Agreements...69 Borrower Pledge Agreement...67 Borrower Security Trustee... 8, 15, 60 Break Costs...61 Business Day...61, 179, 187 Capital Requirements Directive...58 Cash Collateral Account...61 Cash Management and Issuer Account Bank Agreement...9, 151 Cash Manager...9 Cash Trap Period...61 Certification Change of Control...62 Claims class Class A Noteholders...21, 169 Class A Notes... 1, 21, 169 Class B Noteholders...22, 169 Class B Notes... 1, 21, 169 Class C Noteholders...22, 169 Class C Notes... 1, 21, 169 Class D Noteholders...22, 169 Class D Notes... 1, 21, 169 Clearstream, Luxembourg...1 Co-Manager...11 Collection Period...12 Commitment...62 Common Safekeeper...1, 171 Common Security...19, 101 Common Security Agreements...19 Companies Acts Condition Conditions...1, 169 Consent Properties...50 Control Account...62 Controlling Class...17, 136, 196 Controlling Class Test Corporate Services Agreement...10, 160 Corporate Services Provider...10, 160 Corrected Loan Counterparty...62 Coupons Cut-Off Date...11 Declaration of Trust Deferred Capex Period...86 Deferred Capex Programme...86 Deferred Interest Deferred Property...73 Definitive Notes Determination Date...11 Directive Disbursing Agent Disposal...62 Disposal Amount...70 Disposal Proceeds...38, 62 Distribution Compliance Period

241 Dritte Leases...62 Dutch Banking Act...62 Dutch Exemption Regulation...62 Eligible Investments Encumbrance and Restriction...62 Enforcement Action Environmental Consultant Environmental Report...62 Equity Holders...62 EURIBOR...62 euro...4 Euroclear...1 Euroclear/Clearstream Holders , 186 European Union Insolvency Regulation...54 Eurozone Exceptional Expenditures Exchange Date...1, 167, 171 Existing Land Charge Assignments...69 Expected Maturity Date...1 Extraordinary Resolution Facilities Management Services Agreement...63 Facility Agent... 8, 60 Fee Letter...63 Final Maturity Date... 1, 11, 163 Final Recovery Determination Finance Parties...10 Finance Party...63 Financial Indebtedness...63 Financial Regulator...1 First Longstop Date First Utilisation Date...63 Fitch...1, 195 FSA FSMA , 214 General Account...63 German GAAP...61 German Insolvency Code German Security Assignment Agreement...8, 169 Germany...1 Global Note Global Notes...1 Grade Grades Gross Revenue...63 Gross-up Amount...28, 148, 152 Ground Lease...63 Ground-Leased Properties...64 GSCP GSI GSMMDP Hedge Document...64 Hedge Documents...64 Highstreet A...18 Highstreet Holding Partnership Agreement holder of Notes , 172 ICR...13,

242 IFRS...57, 61 Independent Mezzanine Security Initial Drawdown...12, 60 Initial Facility Agent...60 Initial Quarter Date...64 Initial Valuation...64 Insurance...69 Insurance Policies...44 Insurance Policy...44, 64 Interest Amount Interest Coupons Interest Deferral Event Interest Determination Date...12, 178 Interest Drawing Interest Period...12, 178 Interest Shortfall Irish GAAP...57 Irish Paying Agent...9, 169 Irish Share Mortgage...15 Irish Stock Exchange ISDA...10 Issue Date... 1, 11, 169 Issuer... 1, 8, 169 Issuer Account Bank...9 Issuer Accounts...9, 151 Issuer Deed of Charge and Assignment...8, 169 Issuer German Security...23, 174 Issuer Principal Pre-Enforcement Priority of Payments...32, 154 Issuer Revenue Pre-Enforcement Priority of Payments...29, 152 Issuer Secured Creditors Issuer Security...22, 174 Issuer Security Trustee...8, 169 Issuer Sequential Principal Priority of Payments...32, 154, 182 Issuer Share Capital Account Issuer s Profit...29, 152 Joint Security Trust Agreement...8 Junior Reserve Account...64 JV Holding BV...64 JV Holding Pledge Agreement...67 Karstadt...20, 224 Karstadt Sublease...20 KHB KQ KG...64 Land Charges...14, 68 Lead Manager...11 Lease...64 Leased Properties...20 Leased Property...20, 107 Legal Due Diligence Report...64 Lender...10, 60 Level 1 Senior Purchase Event Liquidation Event Liquidation Fee...17, 141 Liquidation Proceeds Liquidity Commitment...26, 146 Liquidity Drawing...26,

243 Liquidity Facility...26, 146 Liquidity Facility Agreement...10, 26 Liquidity Facility Provider...10 Liquidity Subordinated Amounts...31, 153 Loan... 1, 12, 60, 118 Loan Arranger...60 Loan Default...64 Loan Event of Default...64, 92 Loan Final Maturity Date...64 Loan Intercreditor Agreement...19, 101 Loan Interest Period...64 Loan Level Eligible Investments...64 Loan Payment Date...11, 65 Loan Purchase Price Loan Sale Agreement...6, 128 Loan Security Trust Deed...8 LTV...65 Major Casualty...65 Major Sub-Tenant...19, 107 Major Subtenants...11, 20, 107 Majority Lenders...65 Managers Managing Agent...47, 65 Mandatory Costs...65 Market Value...65 Master Definitions and Construction Schedule Master Lease...19, 107 Master Lessee...11, 19, 107 Master Lessee Assignment of Permitted Subleases...69 Master Lessee Assignment of Services Agreements...69 Master Lessee Pledge Agreement...68 Material Adverse Effect...65 Material Sublease...65 Mezzanine Borrower...18, 100 Mezzanine Facility Agent Mezzanine Facility Agreement...18, 100 Mezzanine Facility Guarantors...18, 100 Mezzanine Finance Parties...19 Mezzanine Loan Arranger...18, 100 Mezzanine Permitted Payment Mezzanine Release Amount...65 Mezzanine Secured Obligations Mezzanine Security Agreements Minimum Basis Swap Counterparty Ratings...25, 148 Minimum Liquidity Facility Provider Ratings...10 Modelling Assumptions Moody s...1, 195 Most Junior Class of Notes Most Senior Class of Notes Net Disposal Proceeds...66 Net Mortgage Rate Net Rental Income...66 New Basel Capital Accord...58 Non-Leased Properties Notarial Confirmations...69 Notary Status Table

244 Note Acceleration Notice Note Event of Default Note Factor Note Factors Note Trust Deed...8, 169 Note Trustee...8, 169 Noteholder Noteholders...11, 22, 168, 169, 172 Notes... 1, 21, 169, 170 Official List...1 Operating Advisor...17, 136, 196 Ordinary Resolution Original Mezzanine Lender...18, 100 Originator... 1, 8, 60, 118 Parent...66 Parent Lease Guarantee...69 Partnership Agreement Paying Agents...9, 169 Payment Date... 1, 11, 178 Permanent Global Note...1, 171 Permitted Encumbrance...66 Permitted Subleases...20, 66, 107 Permitted Use Pledge Agreements...68 Portfolio...6, 118 Portfolio A Portfolio A Master Lease...20 Portfolio A Properties...19 Portfolio Due Diligence Post-Enforcement Priority of Payments...33, 155 Pre-Enforcement Priority of Payments...29, 33 Prepayment Interest Arrears Prepayment Interest Deficiency Principal Amount Outstanding...23, 185 Principal Coupons Principal Paying Agent...9, 169 Principal Payments...23, 185 Priority of Payments...33, 155 Priority Period Pro Rata Redemption Amount...32, 154, 182 Pro Rata Redemption of Notes...32, 154 Proceedings Professional Market Party...66 Projected Forward Interest...66 Properties...6, 118 Property... 6, 66 Prospectus...1 Prospectus Directive...1 Prospectus Regulations...1 Quarterly Capex Instalment...66 Quarterly Capex Instalment Amount...66 Quelle...20 Quelle Sublease...20 Quotation Day...66 quoted Eurobonds Rate of Interest...23,

245 Rates of Interest rating Rating Agencies...1, 195 ratings Real Property Purchase Agreement Reference Banks...67, 179 Refinancing Proceeds...38 Refurbishment Properties...46 Regulation...51 Regulation S...1 Reimbursement Rate...18 Related Security... 6, 13 Release Amount...67 Release Amount Differential...67 Release Percentage...67 Release Premium Amount...31, 153, 183 relevant date Relevant Implementation Date Relevant Margin...23, 179 Relevant Member State Remaining Deferred Capex Investments...99 Rent Account...67 Repeating Representations...67 Reports...67 Requisite Rating Reservations...67 Responsible Person...2 Restricted Circle...67 Retained Interest Retained Interest Holder... 1, 18 Retained Interest Holder Intercreditor Deed...18, 133 Revenue Priority Amount Drawing Revenue Priority Amount Shortfall Revenue Receipts...28 S&P...1, 195 Sales Account...67 Scenarios Scheduled Amortisation Amount...31, 153, 183 Screen Rate...67, 179 Second Drawdown...12, 60 Second Longstop Date Securities Act...1, 214 Security Purpose Agreement...68 Senior A Facility Agreement Senior A Finance Parties Senior Facility...60 Senior Facility Agent Senior Facility Agreement... 1, 60 Senior Facility Amount...60 Senior Finance Document...67 Senior Payment Default Senior Secured Obligations Senior Security Document...14, 67 Senior Security Documents...14 Sequential Payment Trigger...31, 153, 183 Sequential Redemption Amount...32, 154,

246 Servicer...8 Servicer Quarterly Report Servicing Agreement...16 Servicing Fee...16, 141 Servicing Standard Share...70 Share Trustee Shares Shortfall Single Purpose Entity...70 Special Servicer...9 Special Servicing Fee...17, 141 Special Servicing Transfer Event Specially Serviced Loan Stabilising Manager...3 Standby Account , 156 Standby Drawing Statement to Noteholders Sublease Default...95 Subscription Agreement Talons TARGET Day Tax...70 Tax Authority...70 Temporary Global Note...1, 171 Termination Major Casualty...70 Test Date...70 Third-Party Leases Total Commitments...70 Transaction Account...27, 151 Transaction Documents Transaction Expenses...70 Transfer Certificate...70 Transferee Unpaid Sum...70 Valuation...71, 116 Valuer...71, 116 VAT Adjustment...71 VAT Group...71 VATA...71 WH SPV...71 Whitehall Wholly-Owned...71 Workout Fee...17, 142 ZVG

247 REGISTERED AND HEAD OFFICE OF THE ISSUER Fleet Street Finance Two P.L.C. 5 Harbourmaster Place International Financial Services Centre Dublin 1 Ireland ISSUER ACCOUNT BANK, PRINCIPAL PAYING AGENT, AGENT BANK, CASH MANAGER Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom SERVICER Capmark Services Ireland Limited Clonmore Mullingar Co. Westmeath and Capmark Services UK Limited Norfolk House 31 St. James s Square London SW1Y 4JJ NOTE TRUSTEE AND ISSUER SECURITY TRUSTEE Deutsche Trustee Company Limited Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom SPECIAL SERVICER Capmark Services UK Limited Norfolk House 31 St. James s Square London SW1Y 4JJ LIQUIDITY FACILITY PROVIDER Lloyds TSB Bank plc 10 Gresham Street, London EC2V 7AE BASIS SWAP COUNTERPARTY Goldman Sachs Mitsui Marine Derivative Products, L.P. 85 Broad Street New York, N.Y U.S.A. IRISH PAYING AGENT Deutsche International Corporate Services (Ireland) Limited 5 Harbourmaster Place International Financial Services Centre Dublin 1, Ireland LISTING AGENT Arthur Cox Listing Services Limited Earlsfort Centre Earlsfort Terrace Dublin 2, Ireland 247

248 AUDITORS TO THE ISSUER Deloitte & Touche Ireland Deloitte & Touche House Dublin 2, Ireland LEGAL ADVISORS To the Arranger, the Lead Manager and the Originator, as to English law and German law Allen & Overy LLP Taunustor Frankfurt am Main Germany To the Note Trustee and Issuer Security Trustee as to English law: Allen & Overy LLP One Bishops Square London E1 6AO United Kingdom To the Issuer as to Irish law: Arthur Cox Earlsfort Centre Earlsfort Terrace Dublin 2, Ireland To the Servicer and Special Servicer as to English law: Caldwalader, Wickersham & Taft LLP 265 Strand London WC2R 1BH United Kingdom imprima C94686